BUSINESS UPDATE

Weak demand in the retail segment caused bank credit growth to only reach 1% in the first half of the year.

However, the bank still maintained a high NIM base compared to Q1 as well as previous quarters.

PBT in Q2 set a new historical high at VND2,948 billion and brought the first half profit to VND5,642 billion, up 12%yoy.

VIB’s asset quality improved in Q2 when the NPL ratio decreased slightly from 2.6% to 2.45%.

The bank received a credit growth limit of 14.25% in 2023.

The new banca agreement signed with Prudential will be the driving force for the bank’s non-interest income in the long term.

RECOMMENDATION

In the long term, we believe that VIB’s growth potential is still very prosperous with the current credit scale being quite modest compared to the leading joint stock commercial banks. Credit growth only reached 1% in the first half of the year, suggesting great room for credit growth for banks in the second half of the year.

Currently, VIB stock has reached the target price we recommended in the report published in March (equivalent to VND19,600/share after dividend). However, based on positive business expectations, we recommend that investors continue to hold stocks for long-term investment goals.