BUSINESS PERFORMANCE UPDATE

In Q1/2025, Techcombank recorded TOI of VND 11,611 billion (-5.3% YoY) and PBT of VND 7,236 billion (-7.2% YoY), affected by declining net interest margin and weaker non-interest income. Operating expenses increased slightly, pushing CIR up to 28.3%, while ROA and ROE dropped to 2.3% and 14.9%, respectively. Asset quality remained under control, with NPL rising slightly to 1.23% and NPL coverage ratio reaching 111.4%. Provision expense declined 10% YoY. Credit grew 3.8% YTD, driven by strong growth in retail lending (+26.6% YoY), focusing on margin lending and industrial real estate. Retail CASA continued to improve, while capital position strengthened with CAR at 15.3%. Although Q1 results declined, solid financial foundation and digital transformation direction provide a basis for profit recovery in coming quarters.

OUTLOOK

We maintain a BUY recommendation on TCB stock with a medium-to-long-term view, based on its solid financial foundation, ability to sustain superior profitability, and leading position in digital transformation. Applying the P/B method (1.25x) and residual income model with more conservative assumptions, our 12-month target price is VND 31,475/share, implying a potential upside of ~19% from the current market price.