MILITARY COMMERCIAL JS BANK (MBB)

We raise our target price for MBB by 40% to VND 27,700/share, driven by an increase in our target P/E multiple from 6.5x to 8.0x to reflect a clear recovery in asset quality, supported by a rebound in the real estate market and a favorable macroeconomic environment. However, we downgrade our recommendation from OUTPERFORM to NEUTRAL as the share price has risen 43% since our previous report.

MBB’s Q2/25 results were quite positive. Pre-provision profit posted solid growth (+27.5% y/y and +8.1% q/q), although PBT declined (-1.7% y/y and -10.5% q/q) as the bank accelerated its provisioning expenses (+138.6% y/y and +60.3% q/q).

Asset quality improved markedly, with the NPL ratio and special mentioned loan ratio falling to 1.6% and 1.3% (-24 bps and -61 bps q/q, respectively). NPL coverage ratio rose to 89% from 75% at the end of the previous quarter.

For 2025, we forecast MBB’s PBT to reach VND 32,358bn, up 12.2% y/y (AGM target: 10%). Of which:

• NII is expected to grow 24.2% y/y, mainly driven by 25% credit growth, while NIM remains stable at 4.18%.
• NFI is expected to be flat y/y due to the high base in Q4 last year when MBB realized gains from its bond portfolio.
• Operating expenses are forecast to increase 12% y/y. CIR is expected to fall from 30.7% to 29.2%, thereby helping MBB maintain its profitability.
• Provisioning expenses are expected to surge 44.8% y/y to strengthen its provision buffers. NPL coverage is projected to remain solid at 93%.

For 2026, we forecast MBB’s PBT to grow 26% y/y to VND 40,774bn, driven by strong credit growth (25%) and easing NPL pressure. Some MBB’s major clients such as Novaland and Trung Nam are recovering well, and MBB’s exposure at them is gradually declining.

With a favorable real estate market and macro backdrop, we raise MBB’s target P/E multiple from 6.5x to 8.0x to reflect the bank’s positive business outlook.