Update MBB – Outperform

We raise our target price by 4.7% to VND29,000 per share by end-2026 and upgrade from NEUTRAL to OUTPERFORM, driven by a 10.5% decline in the share price since our previous report. 2026’s PBT is expected to grow by 24.4%, underpinned by strong credit growth of 25% while the NIM downtrend ends.

Q3/25 earnings slightly declined, with PBT reaching VND 7,250 billion (-0.8% y/y and -3.4% q/q). TOI increased 22.8% y/y but fell 9.6% q/q from a high base in the prior quarter. Meanwhile, operating expenses (+21% y/y) and provisioning expenses (+131.8% y/y) remained elevated, leading to a modest decline in profit.

Credit growth stayed robust (+5.5% q/q, +18.5% YTD, and +30.2% y/y), driven mainly by corporate lending to the real estate & construction sector. NIM continued to compress, although the pace of decline slowed (-9 bps q/q and -20 bps y/y). As a result, NII rose 24.7% y/y and 5% q/q.

NFI weakened (+13.9% y/y but down sharply 46.5% q/q) due to declines in service income (+48.4% y/y and -30.7% q/q) and FX income (-35.7% y/y and -20.5% q/q), while government bond trading recorded a loss of more than VND 500 billion amid rising interest rate environment. Off-balance-sheet debt recoveries also slowed      (-11.9% q/q), though they still increased 72.3% y/y.

Asset quality deteriorated unexpectedly. In Q3/25, a renewable energy company needed a rescheduling of payments, together with CIC-impact, pushing NPL ratio up by 27 bps q/q to 1.87%. Special mentioned loans ratio also edged up by 6 bps q/q. Accordingly, despite provisioning expenses remaining high (+131.8% y/y), NPL coverage ratio declined by 10 percentage points to 79%.

In 9M2025, the bank completed 73% of its full-year plan and 72% of our previous forecast. For full-year 2025, we maintain our PBT forecast at VND 32,200 billion, up 11.7% y/y (AGM target: +10%). For 2026, we forecast PBT to reach VND 40,044 billion, up 24.4% y/y, driven by sustained high credit growth of 25% while the NIM decline comes to an end.

Given stronger expected profit growth in 2026 alongside stable asset quality, we maintain our target P/E of 8.0x, above the historical median of 6.5x.