- 2024-07-29T00:00:00
- Company Research
BID released its H1 2024 results with TOI of VND37.4tn (USD1.5bn; +8% YoY) and PBT of VND15.5tn (USD612mn; +12% YoY), fulfilling 47% and 48% of our respective 2024F forecasts. These imply Q2 2024 PBT of VND8.2tn (+17% YoY; +10% QoQ). Overall, BID’s results were broadly in line with our expectations.
•H1 2024 credit growth was 5.9% (loan growth of 5.9%; corporate bonds decreased 6.7% vs Q4 2023 and accounted for 0.4% of total credit) vs our full-year forecast of 13.0%. BID’s H1 2024 credit growth was broadly the same vs the systemwide credit growth of 6.0%. BID’s H1 2024 credit growth by sectors: agricultural, forestry, and fishery (9.4%); manufacturing and processing (4.2%); utilities (6.1%); construction (-4.7%); wholesales & retail trade (5.2%); services (2.5%).
•H1 2024 customer deposits growth was 6.0% vs our full-year forecast of 13.0% YoY. The CASA ratio was relatively flat QoQ at 18.9%.
•H1 2024 NIM decreased YoY but Q2 2024 NIM improved QoQ. H1 2024 NIM dropped 13 bps YoY to 2.49%, which we attribute mainly to a 143-bp plunge in the IEA yield. We think this could be partly due to (1) support packages for customers, (2) weaker YoY bad debts recover,y and/or (3) a slight deterioration in asset quality amid weak credit growth in most of H1 2024. However, Q2 2024 NIM improved 12 bps QoQ from a low base in Q1 2024, which was mainly driven by a 36-bp decrease in funding cost given that (1) deposit rates offered by SOE banks have not increased yet in H1 2024 and (2) the customer deposits raised last year continued to roll forward to lower yields. We believe BID’s NIM performance is on track to achieve our 2024 NIM forecast of 2.57%.
•Robust NOII with strong performance in Q2 2024. H1 2024 NOII was VND9.0tn (+28% YoY), completing 49% of our full-year forecast, driven by (1) a 14% YoY increase in pure NFI, (2) a 119% YoY spike in gains from trading FX and (2) a 124% YoY surge in gains from trading and investment securities. Q2 2024 NOII increased 48% QoQ due to (1) ongoing strong gains from FX trading activities and (2) a one-off gain of VND512bn from selling investment securities.
•H1 2024 CIR was flat YoY at 32.4% vs our full-year forecast of 34.9%. H1 2024 employee expenses and administrative expenses increased 8% 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.
•Q2 2024 NPL ratio was flat QoQ amid utilizing a provisioning buffer to accelerate writing off bad debts. The Q2 2024 NPL ratio was 1.52% vs our YE forecast of 1.20% given our expectation for (1) stronger credit growth and higher written-off bad debts in H2 2024 and (2) an easing NPL formation. The H1 2024 write-off rate over gross loans was 0.65% vs the Q1 2024 write-off rate at 0.18%. Additionally, Q2 2024 LLR continued to decrease to a three-year low level at 132.2% (-21 ppts QoQ; -20 ppt YoY).
•H1 2024 provision expenses were flat YoY and tracked in line with our expectation (completing 48% of our full-year forecast). Q2 2024 provision expenses increased 22% QoQ which we attribute partly due to the continue rolling forward of Group 2 loans to NPLs. The Group 2 loans level decreased 46 bps QoQ to 1.59%.
BID’s consolidated H1 2024 results
VND bn | H1 2023 | H1 2024 | YoY | Q2 2023 | Q2 2024 | YoY |
NII | 27,483 | 28,379 | 3.3% | 13,547 | 14,838 | 9.5% |
Non-interest income | 7,052 | 9,017 | 27.9% | 3,710 | 5,387 | 45.2% |
OPEX | (11,205) | (12,101) | 8.0% | (6,374) | (6,708) | 5.2% |
PPOP | 23,330 | 25,295 | 8.4% | 10,884 | 13,517 | 24.2% |
Provision expenses | (9,460) | (9,746) | 3.0% | (3,933) | (5,358) | 36.2% |
NPAT-MI | 10,895 | 12,182 | 11.8% | 5,426 | 6,368 | 17.4% |
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Loan growth** | 7.0% | 5.9% | -1.1 ppts | 2.0% | 5.0% | 3.0 ppts |
Deposit growth** | 4.9% | 6.0% | 1.1 ppts | 3.2% | 4.2% | 1.0 ppts |
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NIM | 2.62% | 2.49% | -13 bps | 2.59% | 2.50% | -9 bps |
Interest-earning asset yield | 7.36% | 5.93% | -143 bps | 7.54% | 5.70% | -184 bps |
Cost of funds | 5.05% | 3.63% | -142 bps | 5.30% | 3.39% | -191 bps |
CASA ratio* | 17.0% | 18.9% | 1.9 ppts | 17.0% | 18.9% | 1.9 ppts |
CASA ratio plus term deposits in FX | 20.9% | 22.7% | 1.8 ppts | 20.9% | 22.7% | 1.8 ppts |
CIR | 32.4% | 32.4% | 0.0 ppts | 36.9% | 33.2% | -3.7 ppts |
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NPLs / Gross loans | 1.59% | 1.52% | -7 bps | 1.59% | 1.52% | -7 bps |
Group 2 loans / Gross loans | 2.17% | 1.59% | -58 bps | 2.17% | 1.59% | -58 bps |
Accrued interest / IEAs | 0.66% | 0.68% | 2 bps | 0.66% | 0.68% | 2 bps |
Source: BID, Vietcap — *CASA volume included demand deposits and margin deposits; ** Q2 2023 and Q2 2024 loan and deposit growth is QoQ growth; H1 2023 and H1 2024 loan and deposit growth is 6M growth.
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