BUSINESS RESULT UPDATE

Credit growth was boosted in Q3, with a cumulative growth of 8.7% ytd in the first 9 months.

Pre-tax profit in the third quarter increased by 12.5%yoy. Accumulated in 9 months, PBT reached 15,000 billion VND, up 11.1%yoy. Of which, net interest income increased by 9.3% and non-interest income increased by 50%.

The bank’s NIM continued to narrow compared to the previous 2 quarters. NIM in the third quarter alone decreased to less than 4%.

The bank’s NPL ratio increased to 1.21%, leading to a higher provision expenses pressure.

The bank plans to pay 25% dividends for the period 2023-2024 (10% in cash and 15% in shares).

Business expectations: ACB currently receives a credit growth limit of 14.5% for the year 2023. However, according to the bank’s assessment of the economic outlook in the last quarter of the year and a cautious business perspective, it is hard to fully utilize credit room. On the other hand, the bank’s profit picture is still quite bright compared to its sector peers with double-digit profit growth compared to the same period last year.

RECOMMENDATION

We maintain the same valuation of ACB as previously reported at VND24,700/share. ACB is suitable for the holding portfolio due to its solid business model, prudent risk appetite and first-class safety in the system.