INVESTMENT THESIS

The strong position in the real estate lending and digitalization makes TCB outperform in the sector. (i) Credit growth was intact at 25.4%, driven by individual customers (mortgage, credit cards) and SMEs loan. (ii) Benefiting from low interest rates and cheap syndicated loans helps the bank achieve a PBT growth rate of 47% in 2021, of which NII increased by 42% and NFI increased by 42%yoy, supported by IB-TCBS (+33%) and banca (+88%). (iii) NIM and CASA reached a record high and sector top 1 position, at 5.6% and 50.5%, respectively.

Still promising outlook. (1) The ecosystem will maintain an average credit growth of 23% in the 2022-2024 period. Profit increases 20%/yr thanks to low COF that contributes to keep NIM above 5%. (2) Reinforcing CASA improvement expectation. We believe that TCB has built a very strong position in digital banking, loyal high-middle income customer base those help maintain a sustainable CASA balance in the past and going forward, (3) healthy asset quality with NPL< 1% and reduced provision pressure in the upcoming time thanks to a sharp decrease in restructured loan to 1,900VND bn. (4) the cooperation with Masan remains promising in the long term.

INVESTMENT RISKS

Raised deposit rates will put pressure on NIM shrinking in the short term. In addition, the concentration risk (70% of outstanding loans related to the real estate sector) and deteriorated asset quality due to Covid remain the visible risks.

RECOMMENDATIO

Revising the over forecasted 2021 results and raising NIM expectation, we raised TCB target price to 64,500VND/share, +17.2% compared to the recommendation made on October 29, 2021. We recommend “BUY” TCB with a one-year target price of 64,500VND/share, equivalent to 23% expected return calculated from the closing price on January 26, 2022.