Update VPB – Outperform

VIETNAM PROSPERITY JSC BANK (VPB)

We reduce our target price by 18,9% to VND30,000 per share, mainly driven by a reduction in our target P/E from 9.6x to 7.0x to reflect a higher interest rate environment and the potential deteriorate in asset quality. However, we maintain our OUTPERFORM rating as the share price has already declined 16,2% since our previous report.

2026F PBT forecast remains robust. Following two consecutive years of strong earnings recovery and growth in 2024–25 (+85% y/y and +53% y/y), management continues to target high growth, with 2026 PBT plan reaching VND 41.263 bn, +35% y/y – slightly above our forecast of 31.5% y/y.

Strong credit growth is the key driver of 2026 PBT. As part of the GPBank restructuring, VPB has been granted a credit growth quota of 35% by the SBV. This represents a significant advantage in the context of tighter system-wide credit growth quota of 15% in 2026 (vs. 19% last year). Banks not participating in restructuring weak banks are currently limited to credit growth of only 11–12%.

NIM is expected to expand slightly by 5 bps y/y to 5.93%. We observe that VPB’s listed deposit rates have increased by around 1.5 percentage points since end-Q3/25 (actual increases may be higher when promotional programs are included). Meanwhile, lending rates have generally risen more than deposit rates, supporting a modest NIM expansion in 2026.

Asset quality may face pressure from 2026. VPB’s asset quality has improved significantly since Q3/24, with the overdue loan ratio declining sharply to 6.6% from a peak of over 13%. However, mortgage lending rates have increased by about 3 percentage points, which is likely to exert financial pressure on homebuyers. As a result, we expect the overdue loan formation ratio to rise back to 4% in 2026, from 1% in 2025, leading to a projected 31% y/y increase in provisioning costs.

Overall, we forecast 2026F PBT to maintain strong growth at VND40,263 bn, +31.5% y/y. However, the sharp rise in interest rates may put pressure on asset quality across the banking sector, in which VPB has historically been more sensitive to high interest rate risk, due to a large proportion of consumer finance and real estate lending. Therefore, we lower target P/E to 7.0x – in line with the peer group’s historical median. In addition, the listing of its securities subsidiary VPX is estimated to contribute a re-valuation gain of VND2,174 per share. Accordingly, our target price for VPB by end-2026 is VND30,000 per share.

Re-valuation gain from VPBankS (HOSE: VPX)

VPBankS (HOSE: VPX) is a securities subsidiary 80%-owned by VPBank (VPB) following its acquisition in early 2022. VPX’s strategic objectives focus on expanding market share, developing AI-driven financial products, and entering the digital asset exchange market. Currently, VPX holds an 11% stake in CAEX – one of five companies licensed to operate digital asset exchanges in Vietnam.

A buoyant equity market in 2025 increased VPX’s contribution to group earnings to around 12% of PBT in Q4/25.

Following a successful IPO with an oversubscription rate exceeding 100%, VPX was officially listed on HOSE in December 2025.

At the current price of VND 29,550 per share, VPX’s market capitalization stands at approximately VND 55.406 bn. This implies a re-rating uplift for VPB versus book value of around VND 17.252 bn, equivalent to VND 2,174 per share.

We estimate the valuation correlation ratio between VPX and VPB is 2%, meaning with every 10% increase in VPX share price, VPB valuation increases correspondingly 2%.