2.4 trillion VND of TPBank's deposits at TPS

Tien Phong Securities Joint Stock Company (HoSE: TPS) has just announced its audited semi-annual financial report with several notable points.

In the first half of the year, TPS's operating revenue reached VND 1,621 billion, a 10% increase compared to the same period last year, while operating expenses decreased slightly to VND 1,223 billion. After deducting financial and administrative expenses, TPS earned VND 137 billion in pre-tax profit, a 16% increase compared to the first half of last year.

With these results, TPS has achieved 57% of its revenue target and 60% of its profit target for the year.

The financial statements show that TPS continues to focus on the corporate bond market. In the first half of the year, while investor transactions totaled only nearly 14,000 billion VND, mainly in stocks, TPS's bond trading reached over 95,000 billion VND (stock trading was only 450 billion VND).

TPS's total assets saw impressive growth, reaching VND 9,370 billion, over 40% higher than at the beginning of the year, making it the securities company with the highest growth rate in the first six months of the year according to this criterion. The majority of total assets are cash and cash equivalents (VND 2,431 billion), FVTPL assets (VND 1,564 billion), and receivables from securities services (VND 3,878 billion).

On the other side of the balance sheet, comparable resources increased from a short-term bank loan of VND 930 billion, and other short-term payables increased from VND 852 billion to VND 2,656 billion. TPS still maintains a bond debt of VND 3,000 billion, while charter capital remains stable at VND 2,000 billion.

This year, TPS plans to double its charter capital to VND 4,000 billion through a share offering to existing shareholders and/or a private placement.

TPS still maintains a bond loan of VND 3,000 billion, while its charter capital remains stable at VND 2,000 billion (Source: Financial statements).

The sole major shareholder of TPS is currently Tien Phong Commercial Bank ( TPBank ) with a 9.01% stake. Although its stake is not very large, far below the veto threshold (35%), as mentioned in a previous article, TPBank's influence, or more accurately, the influence of its owners, at TPS is almost absolute. The abundant resources from TPBank have also been the main driving force behind TPS's rise in recent years.

In mid-March 2023, the Board of Directors of TPS passed a resolution to borrow capital from TPBank with a maximum credit limit of VND 2,100 billion. Three months later, on June 14, 2023, the Board of Directors of TPS passed a resolution to borrow VND 1,400 billion from An Binh Commercial Joint Stock Bank (ABBank). The loan was guaranteed by TPBank.

By the end of June, ABBank had disbursed loans to TPS totaling 930 billion VND. This was also TPS's only outstanding credit balance at the end of the second quarter.

Nevertheless, in the first half of the year, TPS borrowed a total of VND 6,100 billion from TPBank, plus VND 930 billion borrowed from ABBank (which was also guaranteed by TPBank), accounting for almost the entire total borrowing of TPS during the period (VND 7,280 billion) as explained in the Cash Flow Statement.

Notably, by the end of June 2023, TPBank's current account balance at TPS had surged to VND 2,428 billion, compared to a mere VND 13.5 billion at the beginning of the year.

This figure is equivalent to 11% of TPBank's charter capital, and if we include the loan guaranteed by TPBank at ABBank, it accounts for up to 15.3% of TPBank's charter capital. Meanwhile, current regulations limit a bank to not extending credit to a single customer exceeding 15% of its equity.

On the balance sheet, the source of funds that saw a significant change during the period was short-term payables, with a balance of VND 2,656 billion, more than three times higher than at the beginning of the year. Of this amount, VND 2,187 billion was payable for the purchase of bonds on behalf of others.

In the assets section, the item with the most noteworthy balance is accounts receivable, totaling VND 4,579 billion, which is 2.3 times TPS's charter capital.

Of this amount, receivables from other services increased sharply from VND 709 billion to VND 3,305 billion. The majority of this amount comes from groups that TPS - TPBank arranged to issue large amounts of bonds in previous years, such as Tay Bac Thang Long Joint Stock Company (VND 308 billion), a legal entity related to R&H Group Joint Stock Company, or nearly VND 1,100 billion from four businesses related to a multi-industry group listed on the HSX, namely Lion City Development Joint Stock Company (VND 320 billion), Renatus Joint Stock Company (VND 310 billion), Artemis Investment Joint Stock Company (VND 236 billion), and Chi Thuy Services Joint Stock Company (VND 225 billion).

TPS's accounts receivable (Source: Financial statements).

Regarding R&H Group, the financial statements of Vinahud Housing and Urban Development Joint Stock Company show that by the end of June 2023, TPBank had disbursed a total of VND 1,710 billion for Vinahud to purchase shares in two project companies from R&H Group.

Previously, TPBank - TPS acted as the arranger for the issuance of over 8,000 billion VND in bonds by R&H Group during the 2020-2021 period. As analyzed in a previous article, a large portion of these bonds are maturing this year, leading to significant pressure not only on the issuer R&H Group, but also on the arranger TPBank - TPS, in the context of increasingly limited options for debt restructuring.

Shortly after TPBank disbursed over 1,700 billion VND to Vinahud, the State Bank of Vietnam recently issued Circular 06/2023 regulating lending activities of credit institutions. This circular stipulates that banks are prohibited from lending to pay for capital contributions, purchases, or transfers of capital contributions in limited liability companies or partnerships; or for capital contributions, purchases, or transfers of shares in joint-stock companies not listed on the stock market or not registered for trading on the UPCoM trading system.

Lending to meet these capital needs often carries inherent risks. This type of capital is difficult to control in terms of its intended use, as the credit institution cannot monitor how the capital is used by the recipient, and lacks a basis for regularly assessing the recipient's financial situation, operational performance, and ability to repay the debt.

In particular, this is also one of the ways customers can use to conceal their ownership of each other .

Hualien

Source: https://www.nguoiduatin.vn/2400-ty-dong-tien-gui-cua-tpbank-o-tps-a621709.html