Update CTG – BUY

We raise our 12-month target price by 13.7% to VND 50,000/share, mainly driven by an 8% upward revision in EPS and the roll-forward of the target price to mid-2027. Our target price is based on a target P/E of 9.4x, broadly in line with the historical median. FY2026F earnings growth is projected at 15% y/y off a high base in 2025 – still a quite good growth outlook. Maintain BUY rating.

1Q26 results were positive, with PBT reaching VND 11,139bn (+63.3% y/y and -19.9% q/q). Growth was driven by NIM expansion, which supported strong TOI growth, while asset quality remained stable and credit cost was well controlled.

In 2026, the SBV reduced credit growth quotas for banks to 11–12%, leading to a moderation in CTG’s credit growth (+12.5% y/y and +1.8% q/q). The more constrained credit growth supported higher lending rates, thereby improving NIM (+18bps y/y, +14bps q/q) to 2.82%. This reflects the structural advantage of state-owned banks with low COF. In addition, preferential lending programs for FDI and mortgage loans are gradually expiring in 2026, further supporting asset yields. CASA remained stable at 25% despite industry-wide pressure from higher interest rates.

NFI continued to grow steadily (+14.8% y/y and +4.6% q/q), supported across all segments including payments, FX, bancassurance, and off-balance-sheet recovery.

Asset quality remained stable. Overdue loan formation ratio in 1Q26 stood at 0.55%, higher than the historical average of 0.37%/quarter, mainly due to seasonality. NPL ratio declined by 8bps q/q to 1.02%, while Group 2 loans increased by 20bps q/q to 1.07%. Credit cost was 0.38%, allowing NPL coverage ratio to remain solid at 167%.

For FY2026, we forecast PBT of VND 49,944bn, up 15% y/y (vs AGM guidance of +4%), mainly driven by:

• Credit growth is forecasted at 12%. NIM is expected to increase slightly by 8bps to 2.75% on stronger loan yields.
• NFI is forecasted to grow 8% y/y, with off-balance-sheet recoveries rising only 5% y/y, reflecting a correction in real estate market.
• Opex are expected to increase 11% y/y, bringing the CIR (excluding bonus and welfare fund provisions) down by 1.1ppt to 29.3% – among the best in the sector.
• Provision costs are projected to increase 22.1% y/y from a relatively low base in 2025 and due to higher overdue loan formation in a high interest rate environment.