CTG released 9M 2022 results with TOI of VND47.3tn (USD1.9bn; +20.6% YoY) and NPAT-MI of VND12.6tn (USD516mn; +13.2% YoY), achieving 76.0% and 62.5% of our FY2022 forecasts, respectively. The increase in the bottom line was mainly due to (1) an 11.8% YoY increase in NII and (2) 55.7% YoY increase in NOII, which were partly offset by a 14.0% YoY increase in OPEX and 33.0% YoY increase in provision expenses. On a quarterly basis, Q3 2022 NPAT-MI was VND3.3tn (-28.1% QoQ & +35.7% YoY). We see potential downside risk to our forecasts for CTG, pending a fuller review.

Corporate bond balance decreased on a QoQ basis, accounting for 1.0% of CTG’s credit balance in Q3 2022. CTG recorded Q3 2022 credit growth of 0.5% QoQ, in which loans to customers increased 0.5% QoQ and the corporate bond balance decreased 3.7% QoQ. 9M 2022 credit growth was 10.2% vs 9M 2022 deposit growth of 2.4%. 

NIM increased on a QoQ basis. CTG reported that 9M 2022 NII increased 11.8% YoY as a result of strong 9M 2022 loan growth, whereas 9M 2022 NIM decreased by 16 bps YoY following a 16-bp YoY increase in COF that outweighed a 1-bp YoY increase in IEA yield. On a QoQ basis, Q3 2022 NIM increased by 15 bps QoQ as a 36-bp QoQ increase in the IEA yield outweighed a 21-bp QoQ increase in COF. We believe the QoQ NIM improvement could be (1) a lower amount of support packages offered in Q3 2022 relative to Q2 2022, (2) a continued shift towards retail lending and (3) a 55-bp QoQ expansion in Q3 2022 CASA ratio. CTG is one of a few banks in our coverage universe that have reported a QoQ CASA ratio increase.

Powered by Froala Editor