Update CTG – BUY

We raise our target price by 25% to VND 63,600 per share by end-2026, based on target P/E and P/B of 9.6x and 1.6x, respectively, while projected PBT to grow 20.3% y/y in 2026. Solid growth in core operating profits and improving asset quality are expected to provide strong support to CTG’s earnings in 2025–26. Maintain BUY recommendation.
3Q25 earnings were quite positive, with PBT reaching VND 10,614bn (+62% y/y and −12.3% q/q). TOI grew modestly by 2.7% y/y and 7.6% q/q, while operating expenses (−1.2% y/y and +3.0% q/q) and provision expenses (−36.7% y/y and +97.2% q/q) remained well controlled.
Credit growth stayed strong (+4.8% q/q, +15.6% ytd, and +23.8% y/y). However, CTG is approaching its nearly 17% credit growth quota of the SBV. NIM recovered slightly by 6 bps q/q but remained 32 bps lower y/y at 2.64%. With limited remaining credit room and rising lending rates, we expect NIM to improve further in 4Q25 and into 2026.
Fee income (+10.7% q/q and −11.9% y/y) and FX trading income (−50.6% q/q and −10.6% y/y) have yet to show a meaningful recovery. A bright spot was strong recovery from off-balance-sheet loan collections (+31.5% q/q, although −28% y/y due to a high base).
Asset quality improved, keeping provision expenses under control (−36.7% y/y). The NPL ratio declined by 22 bps q/q to 1.09% – among the lowest in the sector – while the special mentioned loans ratio edged up 11 bps q/q to 1.08%. The NPL coverage ratio improved to 176%, placing CTG among the best in the industry.
For 9M2025, the bank has completed 87% of its full-year plan and 79% of our previous forecast. For full-year 2025, we raise our PBT forecast by 11% to VND 41,420bn, up 30.4% y/y (well above the AGM target of +7%), mainly driven by lower provision expenses (−23.5% y/y) and steady growth in core operations.
For 2026, we forecast PBT to reach VND 49,836bn, up 20.3% y/y, supported by sustained credit growth of 16.8% and a mild NIM recovery of 8 bps y/y to 2.71%.
A stronger provisioning buffer creates room for CTG’s earnings growth
During 2023–Q1/25, retail customers and several large corporate clients became non-performing kept CTG’s provision expenses at elevated levels. However, as CTG has tightly controlled credit quality and proactively built-up provisions, strengthening its provisioning buffer, we expect provisioning pressure going forward to ease. Better credit costs control will support CTG’s earnings growth in 2025–26.
Regarding potential loans migrating into NPLs, as of end-Q1/25, restructured loans under Circular 02/2023 and Circular 53/2024 accounted for less than 0.1% of CTG’s total outstanding loans, indicating that the risk of restructured loans turning non-performing is negligible. Interest collection days also stood at a moderate level of 40 days, suggesting that latent asset quality risks remain limited.
In response to US tariff-related risks, CTG has proactively reviewed its loan portfolio to identify appropriate mitigation measures. Outstanding loans to corporates with exports to the US account for 8.5% of total loans; however, these corporates typically have diversified export markets and are not overly reliant on the US market. Overall, CTG is not expected to be materially impacted by tariffs.