INVESTMENT THESIS

Steadily expanding market share through digitalization. TPB is the second leading digital bank in the sector. The bank is the first and only bank launching “Livebank” model from 2017 that is a complete digital banking model opened without human contact, a leap from a brick-and-mortar traditional banking model. The number of individual customers climbed to 3.8m in 2021 (+72% compared to YE2018) while eBank transaction value tripled after 2 years. ​ In 2021, TPB recorded a credit growth of 23.4%, among top highest growing banks. PBT climbed 38%yoy, reaching 6,038VND bn.

Asset quality is in safe. In 2021, provision of the bank surged to nearly VND3,000 billion, doubled 2020 figure. Moreover, TPB has actively written off bad debts that leads to lower loan loss coverage ratio compared to peers, but brings the asset quality in a safer position.​

We believe that TPB still enjoys the booming phase in the next 5- year period. The achievement in digitalization, prudent lending assessment, strong buffer (CAR 14%) and lower provision pressure will lever the bank’s growth in coming time. ​

INVESTMENT RISKS

Extending to exploit the corporate bond business has brought better movement for TPB but risk controlling should be more taken care at the same time. Besides, increasing deposit rate will affect bank’s NIM in the short-term.

RECOMMENDATION

Assuming TPB will maintain the credit growth at around 20%/year, NIM 4.5% and CIR 33% in 2022-2024 period, we determine the target price for TPB shares as 39,700VND/share. Along with the fact that the P/B of the stock is at 2.43, which is relatively high compared to peers, we recommend “HOLD” TPB shares with a long-term target price (6-18- month investment term) of 39,700VND/ share, corresponding to an expected return of 5.1%.