• We attended BID’s AGM in Hanoi on April 27. The main agenda was to (1) review 2023 results, (2) approve 2024 targets, (3) approve stock dividend and capital raising plans, and (4) elect a new member to the Board of Directors (BOD) for the 2022-2027 term.

• 2024 credit growth guidance was 14.04% following the receipt of the credit quota from the State Bank of Vietnam (SBV), which is in line with our forecast of 14.0% YoY. In addition, funding growth is to be managed in line with credit growth to maximize funding sources, and the NPL ratio is to be kept below 1.4% (calculated following Circular 11/2021/TT-NHNN). The 2024 profit guidance has not been disclosed. Our forecast for 2024F PBT is VND27.5tn (+25% YoY).

•BID proposed to pay a 21.0% stock dividend on par value using 2022 retained earnings after booking all required reserves, which is expected to occur in 2024. BIDV also plans to use VND12.4tn of 2023 retained earnings to pay stock dividends (the timeline is not yet decided).  

•New progress in private placement: BID proposed a private placement plan of 165 million shares in 2024-2025 (equivalent to 2.9% of current outstanding shares). The bank stated that the investor(s) already have certain commitments and expect to proceed with the sale this year. We note that BID previously also proposed a private placement of up to 9% outstanding shares. BID stated that the bank will continue to find potential investors for the remaining private placement plan (6.1% of outstanding shares).

•BID currently has VND7tn of credit exposure to renewable energy (around 4% of its total loan book). The bank also has a good offshore funding resource to support this segment. 

• BID stated that the bank will not solely focus on any specific customer segment but will keep its loan book structure diversified as current. 

•BID released its Q1 2024 results with TOI of VND17.2tn (USD687mn; -0.6% YoY) and PBT of VND7.4tn (USD296mn; +7% YoY), fulfilling 20% and 22% of our respective 2024F forecasts. Overall, BID’s earnings were broadly in line with our expectations. 

•Q1 2024 credit growth was 0.9% (loan growth 0.9%; corporate bonds decreased 8.5% QoQ and accounted for 0.4% of total credit). 

•Q1 2024 customer deposit growth was 1.8% vs our full-year forecast of 15.0% YoY. The CASA ratio decreased slightly by 1.4 ppts QoQ to 18.8%.  

•Q1 2024 NIM dropped 34 bps QoQ to 2.37% (vs our full-year forecast of 2.72%), which we attribute mainly to a 110-bp plunge in the IEA yield. We think this could be partly due to (1) support packages for customers and/or (2) a slight deterioration in asset quality QoQ amid weak credit growth. 

•Q1 2024 NOII was VND3.6tn (+8.6% YoY), completing 20% of our full-year forecast, which was driven by (1) a 12% YoY increase in pure NFI and (2) a 118% YoY spike in gains from trading FX. However, BID made a loss of VND124bn from trading and investment securities vs a gain of VND66bn in Q1 2023. 

•Q1 2024 CIR increased 3.4 ppts YoY to 31.4% vs our full-year forecast of 33.1%. Q1 2024 employee expenses and administrative expenses increased 13% YoY and 12% YoY, respectively. Normally, BID’s CIR in the later quarters of the year is higher, which we believe could be due to some seasonal expenses. 

•Bad debt metrics ticked up QoQ amid low write-offs and weak credit growth. The NPL ratio increasing by 26 bps to 1.51% in Q1 2024 vs our YE forecast of 1.20%. In addition, the Q1 2024 Group 2 loan ratio increased by 47 bps QoQ to 2.05%.  The Q1 2024 annualized write-off rate over gross loans was 0.35% vs our full-year forecast of 1.10%. 

•Q1 2024 provision expenses decreased 21% YoY and tracked slightly behind our expectation (completing 20% of our full-year forecast). Q1 2024 annualized credit cost was 0.98% (vs 1.11% in 2023). Meanwhile, BID’s LLR decreased 30 ppts QoQ but remained high at 153% (-19 ppts YoY). 

Figure 1: BID’s consolidated Q1 2024 results 

Source: BID, Vietcap — *CASA volume included demand deposits and margin deposits; ** Q1 2023 and Q1 2024 loan and deposit growth is QoQ growth.

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