- 2024-07-30T00:00:00
- Company Research
HDB released its H1 2024 consolidated results with PBT of VND8.2tn (USD321mn; +49% YoY), achieving 51% of our FY2024 and tracking slightly ahead of our expectation mostly due to slightly lower-than-expected provision expenses and strong NII. This implies Q2 2024 PBT of VND4.1tn (+3% QoQ; +51% YoY). We see potential upside to our current earnings forecasts, pending a more extensive review.
- The parent bank’s H1 2024 credit growth was 13.3% (loan growth of 12.8% and corporate bond growth of 30.3%). As of Q2 2024, corporate bonds accounted for 3.4% of HDB’s total credit exposure. The breakdown of new disbursements to some major segments is as follows: 25% to construction; 6% to real estate; 5% to manufacturing, processing; 30% to wholesale and retail trades; 12% to hospitality services; 12% to financial services. Additionally, credit to real estate businesses accounted for 16% of the parent bank’s Q2 2024 loan book.
- According to our estimation, HDS’s loan book increased 5.3% in H1 2024 to VND16.9tn (USD668mn; +1.1% QoQ) — with its loan book contributing 4% to the consolidated loan book. HDS’s Q2 2024 NPL ratio was 7.51% (-4 bps QoQ; -41 bps YoY).
- H1 2024 consolidated deposit growth was 4.3% (2023 deposit growth was abnormally high at 71.8% YoY). The Q2 2024 CASA ratio improved 1.4 ppts QoQ to 9.9%.
- H1 2024 consolidated NIM was 5.39% (+83 bps YoY), which was higher than our full-year forecast of 5.21%. Q2 2024 consolidated NIM was 5.59% (+32 bps QoQ), which was mainly supported by a significant improvement in funding costs from a high base in previous quarters.
- H1 2024 NOII of VND1.2tn (-49% YoY) tracked behind our expectation (completing 37% of our full-year forecast) due to weak performance in both fee income and losses from trading/investment activities.
- Asset quality continued improving QoQ. The Q2 2024 consolidated NPL ratio and Group 2 loans levels were 2.10% (-14 bps QoQ; -5 bps YoY) and 4.50% (-22 bps QoQ; -55 bps YoY), respectively. The Q2 2024 consolidated LLR was 58.8% (+ 2.2 ppts QoQ; -2.5 ppts YoY).
- H1 2024 provision expenses of VND2.4tn (flat YoY) completed 37% of our full-year forecast and tracked behind our expectation. Despite a QoQ improvement in bad debt metrics, we expect upward pressure on HDB’s provision expenses to remain in coming quarters given (1) the remaining high Group 2 loans level and (2) our expectation for HDB to moderately increase its provisioning buffer.
Figure 1: HDB’s consolidated H1 2024 results
VND bn | H1 2023 | H1 2024 | YoY | Q2 2023 | Q2 2024 | YoY |
NII | 9,795 | 14,880 | 51.9% | 4,955 | 7,720 | 55.8% |
Non-interest income | 2,275 | 1,165 | -48.8% | 1,459 | 573 | -60.7% |
OPEX | (4,197) | (5,484) | 30.7% | (2,239) | (3,030) | 35.3% |
PPOP | 7,874 | 10,561 | 34.1% | 4,175 | 5,263 | 26.1% |
Provision expenses | (2,389) | (2,396) | 0.3% | (1,433) | (1,126) | -21.4% |
NPAT-MI | 4,247 | 6,225 | 46.6% | 2,159 | 3,115 | 44.3% |
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Loan growth** | 8.9% | 12.5% | 3.6 ppts | -0.4% | 6.3% | 6.7 ppts |
Deposit growth** | 43.5% | 4.3% | -39.2 ppts | 24.0% | 2.1% | -21.9 ppts |
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NIM | 4.56% | 5.39% | 83 bps | 4.62% | 5.59% | 98 bps |
Interest-earning asset yield | 11.04% | 10.37% | -67 bps | 11.81% | 10.32% | -149 bps |
Cost of funds | 6.65% | 5.05% | -159 bps | 7.38% | 4.80% | -258 bps |
CASA ratio* | 7.4% | 9.9% | 2.5 ppts | 7.4% | 9.9% | 2.5 ppts |
CASA ratio plus term deposits in FX | 7.5% | 10.0% | 2.4 ppts | 7.5% | 10.0% | 2.4 ppts |
CIR | 34.8% | 34.2% | -0.6 ppts | 34.9% | 36.5% | 1.6 ppts |
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NPLs / Gross loans | 2.15% | 2.10% | -5 bps | 2.15% | 2.10% | -5 bps |
Group 2 loans / Gross loans | 5.04% | 4.50% | -55 bps | 5.04% | 4.50% | -55 bps |
Accrued interest / IEAs | 1.24% | 1.29% | 4 bps | 1.24% | 1.29% | 4 bps |
Source: HDB, 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.
Figure 2: HDB’s standalone H1 2024 results
VND bn | H1 2023 | H1 2024 | YoY | Q2 2023 | Q2 2024 | YoY |
NII | 7,370 | 12,242 | 66.1% | 3,723 | 6,379 | 71.3% |
Non-interest income | 2,127 | 539 | -74.7% | 1,225 | 234 | -80.9% |
OPEX | (3,100) | (4,328) | 39.6% | (1,699) | (2,445) | 43.9% |
PPOP | 6,397 | 8,452 | 32.1% | 3,248 | 4,169 | 28.3% |
Provision expenses | (849) | (888) | 4.6% | (558) | (374) | -33.0% |
NPAT-MI | 4,498 | 5,984 | 33.1% | 2,139 | 2,978 | 39.2% |
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Loan growth** | 10.0% | 12.8% | 2.8 ppts | -0.5% | 6.5% | 7.0 ppts |
Deposit growth** | 43.5% | 4.3% | -39.2 ppts | 24.0% | 2.0% | -21.9 ppts |
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NIM | 3.53% | 4.53% | 100 bps | 3.56% | 4.72% | 115 bps |
Interest-earning asset yield | 10.03% | 9.48% | -55 bps | 10.79% | 9.42% | -137 bps |
Cost of funds | 6.63% | 5.00% | -163 bps | 7.36% | 4.75% | -262 bps |
CASA ratio* | 7.4% | 9.9% | 2.5 ppts | 7.4% | 9.9% | 2.5 ppts |
CASA ratio plus term deposits in FX | 7.5% | 10.0% | 2.4 ppts | 7.5% | 10.0% | 2.4 ppts |
CIR | 32.6% | 33.9% | 1.2 ppts | 34.3% | 37.0% | 2.6 ppts |
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NPLs / Gross loans | 1.82% | 1.85% | 3 bps | 1.82% | 1.85% | 3 bps |
Group 2 loans / Gross loans | 4.76% | 4.29% | -47 bps | 4.76% | 4.29% | -47 bps |
Accrued interest / IEAs | 1.24% | 1.25% | 1 bps | 1.24% | 1.25% | 1 bps |
Source: HDB, 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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