PERFORMANCE UPDATES

In the first half of 2023, VPB is one of the banks with the highest credit growth rate in the system, at 13.1%ytd (parent bank).

Deposits grew faster than loans and the increasing cost of capital (COF) was the main reason for the decrease in NII of the bank.

On the non-interest income side, income from securities trading & investment activities as well as from FX activities are still less positive. Meanwhile, the absence of one-off revenue (from the contract with AIA 1H22) caused the bank’s TOI to decline. Excluding this one-off, the parent bank’s TOI was flat in the first half of the year.

However, OPEX surged 28.6% in 1H, causing the consolidated bank’s profit to decrease compared to the same period last year. Meanwhile, FE Credit’s activities continued to record losses, causing a sharp drop in consolidated profit.

COMMENT

In the short term, with the parent bank, we believe VPB can take advantage of its large capital buffer to boost growth in the second half of the year with an ambitious credit growth target of over 30% in 2023. However, the business environment is still not positive considering that Fe Credit’s business is expected to face difficulties in the second half of the year in the context of the sluggish domestic economy and weak consumer demand, as well as the real estate and mortgage sectors might not recover as expected.

We maintain VPB’s targeted price at VND25,000/share.