BUSINESS PERFORMANCE UPDATE

In 2024, LPB recorded positive business performance growth, with total operating income (TOI) reaching a record high. Net interest income (NII) grew strongly by 37.4% YoY thanks to credit scale expansion and optimization of net interest margin (NIM). However, non-interest income (NOI) showed signs of stagnation, decreasing by 9.9% YoY. Preliminary Q1/2025 data shows LPB achieved 6% YTD loan growth, however, net interest income declined compared to the same period last year, indicating pressure on NIM. Nevertheless, improved non-interest income and a slight drop in provision expenses helped LPB still record a 10% YoY growth in pre-tax profit.

OUTLOOK LPB has shown positive developments in business activities with strong profit growth in the past two years. In 2025, we forecast the bank will continue to maintain credit growth of around 17%-20%. However, pressure from funding costs and the business model may slightly reduce NIM, expected to settle around 3.5x%. Thanks to good cost control and contributions from non-interest income, LPB is expected to achieve a pre-tax profit of around VND 11,400 billion in 2025, up 18% YoY. Combining the Residual Income Method and P/B comparison, the target price is determined at VND 26,946 per share.

Recommendation: Neutral