EXECUTIVE SUMMARY:

—We assess that the outlook of Banking stocks in 2024 is POSITIVE. The drivers for price increase of Banking stocks include: (1) Improved business and economic conditions and the recovery of the real estate sector can promote credit growth and increase service fee income for banks; (2) Banks’ NIM in 2024 is expected to improve compared to that of 2023 because of a low interest environment in 2024; (3) The pricing of banking stocks is at an attractive level; (4) Banks’ NPL ratio and bond portfolio are expected to improved with the economic condition, thus improving banks’ asset quality; (5) We assess the long-term outlook of the banking sector is positive. Notable risks of banking stocks that need monitoring: some banks are having high capital adequacy risk and/or liquidity risk.

—We issue a BUY recommendation on MSB with 6-18 months’ target price of VND 19,000/share, an upside of +28% with purchase price of  VND 14,800/share. A notable risk of MSB is that the bank is current having a higher NPL ratio than the sector average.