GTJASVN_TCB Equity Report_1H23 Result Update_July 2023

Research Center

27/07/2023

BUSINESS UPDATE

Credit growth was 8.5%ytd in the first half of 2023. The business performance from credit continues to face many difficulties, in which the rapidly increasing cost of capital has strongly affected the bank’s interest income.

Non-interest income sources such as IB and banca continues to face challenges.

The bank’s NIM narrowed to 4.3% at the end of Q2.

NPL ratio increased to 1.07%. CASA improved slightly from the Q1 low level to 34.9%, but still far from the peak set at 50%.

Profit before tax in the first half of the year reached VND11,300 billion, down 20%yoy.

COMMENT

In general, 2023 is a relatively difficult year for the whole banking sector in general as well as for TCB in particular. The weakening economy and stagnant real estate business hit TCB’s key business segments, which are real estate lending (the value chain accounts for 70% of total loans to business customers) and mortgage (which account for 80% of individual loans).

We maintain a cautious view on TCB’s business results in 2023 with a projected profit before tax of about VND 23,000 billion, down 10% yoy.

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