Update TCB – Outperform

We raise our target price by 2% to VND 39,000 per share by end-2026, based on (1) a target P/E of 8.x and (2) an additional revaluation gain of VND7,400 per share from the IPO and listing of TCX (TCBS). Core business is expected to grow positively in 2026F, on the back of a resilient real estate market, while asset quality remains well controlled. Maintain OUTPERFORM recommendation.
3Q25 earnings were quite positive. TOI recorded strong growth (+21.2% y/y), but a sharp increase in operating expenses (+35.2% y/y) and provisioning expenses (+35.2% y/y) limited PBT growth to a moderate level (+14.4% y/y and +4.4% q/q).
Credit growth remained solid (+22% y/y, +17.9% ytd, and +6.1% q/q), driven by expansion across most customer segments. NIM edged up slightly (+4 bps q/q) to 3.89%, supported by an improvement in CASA and lending yields rising faster than funding costs.
NFI was impressive (+52.8% y/y and +19.7% q/q), led by securities investment income (mainly from TCX), which surged 172% y/y and 77% q/q, thanks to favorable stock market conditions. Fee income continued its growth trajectory (+16.4% y/y and +7.5% q/q), supported by a recovery in payment fees and insurance activities beginning to generate income.
Asset quality remained stable at a healthy level. NPL ratio declined by 10 bps q/q to 1.16%, while the special mentioned loans ratio was unchanged. NPL coverage ratio increased by 13 ppts q/q to 119%. Accrued interest collection days stayed stable at 54 days, suggesting that latent asset quality risks remain contained.
For 9M2025, the bank has completed 74% of its full-year plan and 71% of our previous forecast. For full-year 2025, we decrease our PBT forecast by 3.7% to VND31,867bn, up 15.7% y/y (AGM target: +14.4%), mainly due to higher than expected provision expenses. For 2026, we forecast PBT of VND36,663 bn, +15.1% y/y, driven by robust credit growth of 20% and easing provision costs (−13% y/y).
TCX has successfully completed its IPO and is currently trading around its IPO price of VND 46,800 per share, implying a market capitalization of VND 108tn, above its book value of VND 65,700 bn. With an ownership of 79.8%, the investment in TCX is estimated to deliver a revaluation gain equivalent to VND7,400 per TCB share.