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Update VPB – Outperform
21/10/2026 - 3:19:57 CHVIETNAM PROSPERITY JSC BANK (VPB)
We maintain our target price at VND27,900/share but downgrade to OUTPERFORM as the share price has risen 17.9% since our last report. 3Q26 results were in line with the AGM plan and our forecast. 9M2026 PBT reached VND29,911 bn (+46.7% y/y), completing 72.4% of the AGM target and 71.6% of our 2026F forecast (VND41,775 bn, +36.4% y/y).
3Q26 PBT stalled (+20.3% y/y, +0.7% q/q) at VND11,031 bn: although credit continued to grow well, NIM declined sharply. On the other hand, lower provisioning costs helped protect earnings.
Credit growth slowed but remained 2.4 times the industry (+4.0% q/q and +28.2% YTD vs. +11.6% for the industry), driven mainly by lending to household businesses. Lending to real estate and construction businesses was flat (+1.0% q/q) after rising 19.4% in 2Q, accounting for 29.7% of total loans.
NIM fell 35 bps q/q to 5.09% as funding costs rose 32 bps to 6.49% while asset yields were flat. Room for NIM recovery is limited as the SBV is firmly directing banks to cut lending rates; we forecast NIM of 5.29% and 5.17% in 2026-27F, down 57 bps and 12 bps, respectively.
NFI fell 22.7% y/y despite fee income rising 29.1%, as the FX business posted a loss for the third consecutive quarter (VND729 bn) due to higher currency derivative costs, and trading securities recorded a loss of VND363 bn.
Asset quality is under pressure. NPL ratio fell 16 bps to 3.1% thanks to write-offs of VND7,196 bn, while Group 2 loan ratio rose 39 bps to 3.6%, overdue loan formation rose to 1.12% in 3Q26 and days of accrued interest rose to 58. NPL coverage ratio fell to 54%, below the industry median (66.8%). Credit growth of 35% y/y is holding down NPL ratio and, together with real estate and construction loans at nearly 30% of loan book, is raising provisioning pressure.
Despite mounting NIM pressure, PBT is forecast to grow ~30% p.a. in 2026-27F on well-controlled provisioning costs; we maintain our target P/E of 7x – in line with peer’s historical median. Accordingly, our 1y target price is VND27,900/share. Our forecast excludes the planned private placement of 624m shares.
