ACB announced its 9M 2022 results with TOI of VND20.9tn (USD815.6mn; +18.6% YoY) and bottom-line net profit of VND10.8tn (USD441.6mn; +50.8% YoY), achieving 73.0% and 72.7% of our FY2022 forecasts, respectively. The strong increase in ACB’s 9M 2022 NPAT was mainly due to (1) a 20.7% YoY increase in NII, (2) 21.1% YoY increase in pure NFI, (3) VND849bn gain from net other income compared to a low base of VND70bn in 9M 2021 — we believe most of this was from the recovery of writing-off bad debts — and (4) a huge reversal of provision for restructured loans that supported ACB to record VND180bn of provision income. These factors were partly offset by (1) a 14.1% YoY decline in FX trading income, (2) VND278bn loss from trading securities compared with a VND389bn gain in 9M 2021, (3) 87.4% YoY decline in gains from investment securities and (4) 29.7% YoY increase in OPEX that resulted in a higher CIR. We currently do not foresee any material changes to our forecasts, pending a fuller review.

Effective capital management in a limited credit quota environment. ACB recorded total credit growth of 11.3% in 9M 2022 vs its credit quota of 12.7%. Credit growth was restrained in Q3 2022 at only 1.68% QoQ due to a later-than-expected credit quota top-up, which we believe is the reason for the relatively low deposit interest rates applied by ACB and resulting 9M 2022 deposit growth of just 3.2%. Per our estimation, regulated LDR was around 83%-84% in 9M 2022, which helped to reduce the negative effect of rising interest rates on NIM.

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