- 2024-10-29T00:00:00
- Company Research
HDB released its 9M 2024 consolidated results with PBT of VND12.7tn (USD506mn; +47% YoY), achieving 77% of our FY2024 forecast and tracked slightly ahead of our expectation, mostly due to slightly lower-than-expected provision expenses. This implies Q3 2024 PBT of VND4.5tn (+9% QoQ; +43% YoY). We see potential upside to our current earnings forecasts, pending a more extensive review.
- 9M 2024 parent bank’s credit growth was 17.0% (including loan growth of 16.5% and corporate bond growth of 31.8%). As of Q3 2024, corporate bonds accounted for 3.5% of HDB’s total credit exposure.
- 9M 2024 consolidated deposit growth was 7.1%. The Q3 2024 CASA ratio slightly decreased by 1.0 ppts QoQ to 8.9% (+1.7 ppts YoY).
- 9M 2024 NIM was 5.30% (+91 bps YoY), slightly higher than our full-year forecast of 5.26%. Q3 2024 NIM was 5.46% (-14 bps QoQ; +105 bps YoY). The QoQ NIM contraction was mainly driven by a 34-bp QoQ decrease in the IEA yield that outweighed a 16-bp QoQ decrease in funding costs.
- 9M 2024 NOII of VND1.9tn (-44% YoY) tracked behind our expectation (completing 64% of our full-year forecast) due to losses from trading/investment activities.
- 9M 2024 CIR was 34.3% (-1.5 ppts YoY; roughly the same as our full-year forecast).
- Asset quality improved QoQ. Q3 2024 NPL ratio: 1.90% (-20 bps QoQ; -37 bps YoY). Q3 2024 group 2 loans to gross loans: 3.75% (-75 bps QoQ; -130 bps YoY). Q3 2024 consolidated LLR was 65.9% (+7.1 ppts QoQ; +11.7 ppts YoY).
- 9M 2024 provision expenses of VND3.5tn (+15% YoY) complete 62% of our full-year forecast and tracked behind our expectation. Despite a QoQ improvement in bad debt metrics, we expect higher provision expenses in coming quarters given (1) the remaining high Group 2 loans level and (2) our expectation for HDB to increase its provisioning buffer.
- ROE was 26.7% and ROA was 2.2% in 9M 2024. Q3 2024 CAR was 14.8%, among the highest CAR in the banking system.
- HDSaison: 9M 2024 loan growth was 7%. 9M 2024 PBT was VND906bn (+126% YoY; completing 70% of our full-year forecast; in line with our expectation). We estimate that the Q3 2024 NPL ratio was 7.5% (flat QoQ).
Figure 1: HDB’s consolidated 9M 2024 results
VND bn | 9M 2023 | 9M 2024 | YoY | Q3 2023 | Q3 2024 | YoY |
NII | 14,711 | 22,654 | 54.0% | 4,916 | 7,773 | 58.1% |
Non-interest income | 3,445 | 1,926 | -44.1% | 1,169 | 762 | -34.9% |
OPEX | (6,499) | (8,435) | 29.8% | (2,302) | (2,951) | 28.2% |
PPOP | 11,657 | 16,145 | 38.5% | 3,783 | 5,584 | 47.6% |
Provision expenses | (3,025) | (3,490) | 15.3% | (636) | (1,093) | 71.9% |
NPAT-MI | 6,727 | 9,649 | 43.4% | 2,480 | 3,424 | 38.0% |
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Loan growth** | 10.6% | 16.1% | 5.6 ppts | 1.5% | 3.2% | 1.7 ppts |
Deposit growth** | 58.3% | 7.1% | -51.3 ppts | 10.4% | 2.7% | -7.7 ppts |
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NIM | 4.39% | 5.30% | 91 bps | 4.40% | 5.46% | 105 bps |
Interest-earning asset yield | 11.07% | 10.02% | -105 bps | 11.99% | 9.98% | -201 bps |
Cost of funds | 6.79% | 4.84% | -195 bps | 7.72% | 4.64% | -308 bps |
CASA ratio* | 7.2% | 8.9% | 1.7 ppts | 7.2% | 8.9% | 1.7 ppts |
CASA ratio plus term deposits in FX | 7.3% | 9.0% | 1.7 ppts | 7.3% | 9.0% | 1.7 ppts |
CIR | 35.8% | 34.3% | -1.5 ppts | 37.8% | 34.6% | -3.3 ppts |
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NPLs / Gross loans | 2.26% | 1.90% | -37 bps | 2.26% | 1.90% | -37 bps |
Group 2 loans / Gross loans | 5.04% | 3.75% | -130 bps | 5.04% | 3.75% | -130 bps |
Accrued interest / IEAs | 1.18% | 1.13% | -6 bps | 1.18% | 1.13% | -6 bps |
Source: HDB, Vietcap — *CASA volume included demand deposits and margin deposits; ** Q3 2023 and Q3 2024 loan and deposit growth is QoQ growth; 9M 2023 and 9M 2024 loan and deposit growth is 9M growth.
Figure 2: HDB’s standalone 9M 2024 results
VND bn | 9M 2023 | 9M 2024 | YoY | Q3 2023 | Q3 2024 | YoY |
NII | 11,067 | 18,635 | 68.4% | 3,697 | 6,394 | 72.9% |
Non-interest income | 3,030 | 984 | -67.5% | 903 | 445 | -50.8% |
OPEX | (4,775) | (6,689) | 40.1% | (1,674) | (2,360) | 41.0% |
PPOP | 9,323 | 12,930 | 38.7% | 2,926 | 4,478 | 53.1% |
Provision expenses | (713) | (1,204) | 68.9% | 136 | (315) | -331.2% |
NPAT-MI | 6,945 | 9,264 | 33.4% | 2,447 | 3,280 | 34.0% |
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Loan growth** | 12.0% | 16.5% | 4.5 ppts | 1.8% | 3.3% | 1.5 ppts |
Deposit growth** | 58.3% | 7.1% | -51.3 ppts | 10.4% | 2.7% | -7.7 ppts |
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NIM | 3.39% | 4.45% | 105 bps | 3.40% | 4.58% | 118 bps |
Interest-earning asset yield | 10.10% | 9.15% | -94 bps | 11.00% | 9.10% | -190 bps |
Cost of funds | 6.76% | 4.79% | -197 bps | 7.67% | 4.60% | -306 bps |
CASA ratio* | 7.2% | 8.9% | 1.7 ppts | 7.2% | 8.9% | 1.7 ppts |
CASA ratio plus term deposits in FX | 7.3% | 9.0% | 1.7 ppts | 7.3% | 9.0% | 1.7 ppts |
CIR | 33.9% | 34.1% | 0.2 ppts | 36.4% | 34.5% | -1.9 ppts |
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NPLs / Gross loans | 1.96% | 1.65% | -31 bps | 1.96% | 1.65% | -31 bps |
Group 2 loans / Gross loans | 4.83% | 3.56% | -126 bps | 4.83% | 3.56% | -126 bps |
Accrued interest / IEAs | 1.19% | 1.10% | -8 bps | 1.19% | 1.25% | 6 bps |
Source: HDB, Vietcap — *CASA volume included demand deposits and margin deposits; ** Q3 2023 and Q3 2024 loan and deposit growth is QoQ growth; 9M 2023 and 9M 2024 loan and deposit growth is 9M growth.
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