BANK FOR INVESTMENT AND DEVELOPMENT

We cut our 12-month target price by 9% to VND36,400/share as we lower our target P/E to 8.0x (-1 standard deviation) given low earnings growth and high interest rates, partly offset by 13.8%/6.8% increases in our 2026F/2027F EPS forecasts and rolling our valuation forward to 2027F. OUTPERFORM.

In 9M2026, PBT reached VND29,483bn (+24.8% y/y), fulfilling 70.8% of the full-year target (+10% y/y) and 70.7% of our forecast (+10.2% y/y).

3Q26 PBT reached VND10,579bn (+39.3% y/y, +2.4% q/q), mainly thanks to a 25.0% y/y cut in provision costs, which brought NPL coverage down to 73.4%. NII rose 12.4% y/y and opex 8.3% y/y (CIR 34.4%), so pre-provision profit grew only 10.4% y/y.

Credit growth lagged the sector (+2.4% q/q and +8.0% YTD vs. +11.6% for the system), against an assigned credit quota of 11%, driven by large corporates (+12.4%) and FDI (+54.2%), while retail slowed (+4.0%) and SME declined (-6.1%).

NIM narrowed 11 bps q/q to 2.06%, as COF rose 56 bps to 4.6%, faster than the YOEA (+41 bps to 6.47%), amid sharply higher deposit rates in 3Q26. We expect NIM to improve in 4Q as deposit rates fall ahead of lending rates under the SBV’s guidance, together with the year-end seasonality of interest income recognition. We forecast 2026F/27F NIM at 2.20%/2.15% (+4 bps/-5 bps).

NFI rose 2.8% y/y thanks to recoveries from written-off loans (+19.5%), FX (+18.0%) and fees (+7.2% y/y), offsetting a 79.9% decline in securities income.

Asset quality weakened. The overdue loan formation ratio rose to 0.6%, above its historical average of 0.41%. The NPL ratio was flat at 1.85% and the Group 2 loan ratio rose 32 bps to 1.54%, while NPL coverage fell from 75.9% to 73.4% (beginning of year: 99.9%). We forecast 2026F provisions of VND25,245bn (credit costs of 1.0%), in line with BID’s provisioning plan of VND25,240bn.

We forecast 2027F PBT at VND45,968bn (+10.2% y/y), driven by 15% credit growth, partly offset by credit costs rising to 1.1% to keep NPL coverage at around 74% and a slightly lower NIM. Our forecasts do not include new capital raisings.

Given low earnings growth amid high interest rates, we apply a target P/E of 8.0x, 1 standard deviation below the historical median, resulting in a 12-month target price of VND36,400/share. We maintain our OUTPERFORM recommendation.