Lien Viet Post Joint Stock Commercial Bank (LPBank, HoSE: LPB) has just announced its financial report for the second quarter of 2023 with poor business results.
Accordingly, the bank's net interest income recorded more than VND2,450 billion, down 20% compared to the same period. Non-interest income sources also followed a downward trend, such as net interest income from service activities down 18% to VND249.3 billion, net interest income from foreign exchange trading down 64% to nearly VND19 billion.
Notably, LPBank recorded a loss of VND4.5 billion from trading investment securities, while in the same period it made a profit of VND356.2 billion. The only bright spot in non-interest income was a profit of VND30.2 billion from trading business securities, while in the same period it did not arise.
During the period, net profit from other activities reached nearly VND111 billion, while in the same period only over VND15 billion was recorded; income from capital contributions and share purchases also increased from VND825 million in the same period to VND31.2 billion in this period.
Meanwhile, LPBank's operating expenses increased by 10% to VND1,480 billion, but the bank set aside nearly VND525.8 billion for credit risk provisions, down 18% over the same period.
As a result, LPBank reported pre-tax profit and after-tax profit decreased by 51% compared to the same period, reaching VND880.4 billion and VND708.2 billion, respectively.
Faced with strong fluctuations in profits, LPBank General Director Ho Nam Tien said that, in order to implement the State Bank's policy, LPBank has implemented policies and packages to support lending interest rates and reduce fees and charges for customers. In the context of high deposit interest rates, the bank's net interest margin (NIM) has been partly affected, causing LPBank's interest income to decrease compared to the same period.
In the first 6 months of the year, LPBank's net interest income reached nearly VND5,224.3 billion, down 12% year-on-year. Non-interest income recorded a decline, with foreign exchange trading being more positive, reaching nearly VND164 billion, up 4 times year-on-year. However, the bank reduced its provisioning costs by 21% to VND749.8 billion.
As a result, LPBank reported a profit after tax of more than VND 1,951.5 billion in the first half of 2023, down 32% year-on-year. Compared to the target profit after tax of VND 4,800 billion for this year, after the first 6 months of the year, LPBank has only achieved 41% of the plan.
As of June 30, 2023, LPBank's total assets were recorded at VND 350.2 billion, up nearly 7% compared to the beginning of the year; customer loans accounted for the majority with VND 253.4 billion, up 7%. Customer deposits increased by 4% to VND 224.1 billion. Thus, LPBank's customer loan/deposit ratio by the end of the second quarter was quite high at 113%.
Regarding debt quality, by the end of the second quarter of 2023, the bank recorded VND5,656 billion in bad debt, an increase of 65% compared to the beginning of the year. Of which, group 3 debt increased by 49% to VND1,598 billion, group 4 debt increased by 61% to VND1,620 billion and group 5 debt increased by 80% to VND2,438 billion.
The increase in bad debt balance has increased the ratio of bad debt to outstanding loans from 1.45% at the beginning of the year to 2.23%.
Another notable content in LPBank's financial report is the fluctuation in personnel. As of June 30, 2023, this bank had 10,818 employees, a decrease of 1,464 employees compared to the end of March 2023 and 1,385 employees compared to the end of December 2022 .
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