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VIB Equity Report- GROWTH DRIVEN BY RETAIL BANKING

13/04/2021

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Investment thesis:

Catalysts:

– Confirmed position in the retail segment: VIB currently leads the market share of auto loans in Vietnam from 2017 (30% market share), No. 1 in the sector in retail lending growth with an average growth rate of over 50% in the period of 2017-2020; No. 1 market in terms of in-surance distribution through banking channels (Bancas).

– Impressive profit growth & efficiency: credit growth of 28% in 2020. In which, retail lending (mortgage and auto loans) grew by 34%yoy. In addition, top- of -sector-insurance income continued to support non-interest in-come growth reaching 40.26%. ROA and ROE are among the top in the sector (top 4 and top 1, respectively).

– The bank PBT and credit are expected to continue to strongly grow in the coming period with the expectation of the real estate market recovering, the automobile market growing at an average rate of 20%-25% in the pe-riod of 2021-2025.

– VIB shares relisted on HOSE (from UPCOM) at the end of 2020, creates opportunities to attract both domestic and international investment capital.

Risks:

– Credit risk due to Covid impacts. Also, the bank faces cap-ital- raising pressure to meet requirements for credit growth.

Recommendation:

VIB shares was recommended to buy on Feb 05, 2021 (inves-tors can track the Holding Portfolio on IVS’s Daily/weekly report). The bank stocks are currently trading at P/E that 10% discount to peers, making the 45,000VND-50,000VND price range is quite safe to continue holding.

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