FE Credit lost more than 700 billion VND in the first half of 2024

SMBC Vietnam Prosperity Bank Finance Company Limited (FE Credit) has just sent a document to the Hanoi Stock Exchange to periodically announce information on the financial situation for the first half of 2024.

Accordingly, at the end of the first 6 months of 2024, FE Credit recorded a loss after tax of 707 billion VND, while in the same period last year it lost 2,995 billion VND.

The company's equity decreased by 6.6% year-on-year to VND9,572 billion, causing FE Credit's return on equity (ROE) to be negative 7.13%.

In 2024, VPBank set FE Credit's profit target at VND1,200 billion. However, with the current situation, the company is still far from the set profit target.

The company's debt/equity ratio decreased from 5.43 times to 5.08 times, equivalent to liabilities decreasing from VND 55,658 billion to VND 48,626 billion.

Of which, the company's bond debt/equity balance has decreased from 27.29% to 1.04%, equivalent to a bond debt balance of VND 99.5 billion. The capital safety ratio according to specialized law is 14.41%.

According to the periodic report on the situation of principal and interest payments in the first half of 2024, FE Credit spent VND 125 billion to pay interest and VND 1,300 billion to pay bond principal.

According to information from the Hanoi Stock Exchange, in 2024, FECredit has not issued or bought back any bonds.

The last time FE Credit raised bonds was in 2022, the company raised a total of 8 bond codes with a total value of VND 2,400 billion.

FE Credit used to be a Vietnam Prosperity Bank Finance Company Limited. However, in October 2021, VPBank completed the sale of 49% of FE Credit's charter capital to SMBC Consumer Finance Company, a subsidiary 100% owned by Japan's Sumitomo Mitsui Financial Group.

FE Credit from Vietnam Prosperity Bank Finance Company Limited was renamed to Vietnam Prosperity Bank Finance Company Limited SMBC.

During its heyday, FE Credit was considered VPBank's "golden goose" when it contributed 40-50% of the bank's profits for many consecutive years. From 2017 to 2020, this financial company reported profits of thousands of billions of VND. In 2019, FE Credit earned nearly 3,600 billion VND in profit, reduced to 300 billion VND in 2021 and suffered losses in 2023-2024.

According to KB Securities (KBSV), it will take another 1 to 2 quarters to see more clearly the recovery of FE Credit. In case FE Credit makes a profit again, it will contribute significantly to VPBank's profit growth this year when in 2023 FE Credit lost VND 3,698 billion, equivalent to 13.5% of the parent bank's pre-tax profit (the parent bank owns 50% of FE Credit's capital).

Source: https://www.nguoiduatin.vn/fe-credit-lo-hon-700-ty-dong-nua-dau-nam-2024-20424092416175504.htm