Research Center

Banking Sector Report_Glowing long-term prospect_Outperform

13/08/2021

Share:

Glowing prospect_Outperform

In the short term, the banking sector will be hit by the 4th Covid outbreak, causing the third quarter credit growth to slow down somewhat. Provision expenses pressure and interest rate support packages would reduce profit growth compared to the 1st haft.

However, after reviewing, we assumed that NIM overall would only slightly decrease by about 0.2%-0.3% in the second half of the year. Moreover, some banks can still maintain high NIM (TCB, TPB) thanks to their low funding cost advantage in market 2.

Policy is the most important factor contributing to the sector’s asset quality under control. In 1H2021, many banks have sharply reduced restructuring loan as well as NPL, while debts collection has been escalated, provision expenses also increased. Those actions partly reduce the pressure for the second half of the year.

There would be less catalysts in 2H2021 as most banks have completed dividend payment as well as important deals have been unveiled (as at VPB).

RECOMMENDATION

With the above discussions, we maintain an “Outperform” rating for the Banking sector.

We expect total credit growth of the economy at 9%-10% in 2021, NIM averaged at 3.3% and profit growth of 30%yoy.

Regarding the investment ideas for the next 6-18 months, we are interested in stocks with positive business prospects, effective business models, good asset quality with a high bad debt coverage ratio. Accordingly, we select TCB, MBB, CTG and VCB as potential investment.

Report here

Danh sách báo cáo liên quan

(EN) GTJASVN_Sector Report_Port & Maritime Transport_Positive_21.3.2025_Eng ver

24/03/2025

(EN) GTJASVN_Sector Report_Port & Maritime Transport_Positive_21.3.2025_Eng ver

GTJAS_Sector Report_Residential Real Estate Report_2025 Outlook_Mild recovery_26Feb2024

27/02/2025

2025 OUTLOOK The completion of the legal framework governing the real estate sector, marked by the introduction of three amended laws, has played a pivotal...

GTJASVN_HAH Equity Report_Buy Upside 16.7%__19.02.2025

19/02/2025

INVESTMENT THESIS 1.HAH continuously upgrades its fleet capacity to 26,500 TEU (+50.03% YoY) while maintaining its leading market share (30%) in the container...

Contact

    • Stock index
    • VNINDEX: 1210.67   -19.17   (-1.56%)
    • HNX: 216.97   -3.97   (-1.8%)