BUSINESS UPDATES

Q1/2022 preliminary results: Total assets +6%, Credit +7% (per 10% credit room 2022 allowed by SBV), deposits +5%. PBT + 10%-15% yoy.

2022 target:  Retail banking: individual and SME segments are key focuses of growth. Intact NIM at around the 3%, equivalent to 2021. CASA is expected to rise to 25%-26% by the end of 2022 or 2023.

Banca revenue is expected to triple in 2021 to VND1,000-1,200 billion and grow by 30%-40% in the following years.

Provision expenses expected to be 12,000-15,000 billion. Loan loss coverage ratio is up, over 180% and NPL ratio is controlled below 1.8%.

RECOMMENDATIONS

CTG is setting out a cautious business plan after a tumultuous year. Despite pressure on bad debts, there are still bright spots in CTG’s business: retail focus will enhance CASA, by that NIM improves while insurance activities will have a breakthrough from this year, along with plans for collecting trade guarantee fees or divestment of subsidiaries, it will be a catalyst for the bank’s non-interest income growth.

We expect CTG to achieve a credit growth rate of 15% in 2022, with profit growth of 50% thanks to a sharp reduction in provision expenses.

We maintain the previous recommended price with CTG at the target price of 38,400VND/share, investment term of 6-18 months.