BUSINESS UPDATE

Credit increased 12.41% YTD, mainly from large enterprises and SMEs. Meanwhile, MSB’s capital sources mainly came from deposits and the interbank market, with customer deposits reaching VND151,743 billion, up 10.1% QoQ.

Capital from market 2 increased 19.5% QoQ, reaching VND33,880 billion. CASA ratio recovered to 27.6%, with strong growth from SMEs (+18.9% QoQ).

MSB’s pre-tax profit reached VND2,160 billion, up 41.2% QoQ. Non-interest income increased sharply, although NIM decreased from 3.9% to 3.7% due to capital costs.

Asset quality improved with risk provisions reaching VND3,007 billion, while the bad debt ratio increased slightly to 2.13%. CAR remained high, above 12.13%.

RECOMMENDATION

We believe that in the coming quarter, MSB’s NIM will improve thanks to the SBV’s more stable monetary policy and the cooling of interbank market interest rates (one of MSB’s mobilization channels).

Interest income played a leading role in the bank’s profit growth in the first half of the year. Regarding non-interest business activities, service fee activities as well as FX and investment activities still maintained positive profit growth.

In terms of asset quality, we expect the bank’s bad debt ratio to approach the peak and will remain stable or decrease slightly in the next 2 quarters.