BUSINESS PERFORMANCE

Total credit increased by 11.6%ytd. The bank reported VND13,503 bn PBT in the first 9 months.
NIM was slightly up to 4.1% from 4.0% in Q2 thanks to well cost control, making NII higher. On the other hand, non-interest income growth was weaker.
The bank invests only in government bonds and has no exposure to corporate bonds.
The NPL ratio increased from 0.76% to 1.02%. The restructured loan slightly declined to over VND11 trn.

COMMENT
The bank managed cost to lending well in the first 9 months, illustrated in higher NIM. Following that strategy, LDR was quite high at 83% (SBV limits at 85%) as lending growth was 3 times of deposit growth.
The provision pressure is quite significant in the upcoming time given VND11trn remaining restructured loan.
We believe that ACB’s business will remain stable without a sudden change given its stubborn strategy. The bank’s no exposure to corporate bonds is a plus point to ensure asset quality is under control.

We maintain a “Hold” recommendation for ACB.