MBB [BUY +34.2%] - Strong provisioning buffer helps to ease credit costs

- We increase our target price (TP) for MBB by 2.7% to VND25,000/share and maintain our BUY rating. Our higher TP is mainly due to a 4.7% increase in our projected aggregate 2023-2027F NPAT-MI (respective increases of 5.0%/7.7%/5.6%/5.4%/1.7% for 2023/24/25/26/27F).

- We increase our 2023F net income by 4.8% to VND21.0tn (USD892mn; +15.4% YoY) due to (1) a 14.8% cut in provision expenses that is partly offset by (2) a 4.9% decrease in NOII.

- We maintain our expectation that MBB can overcome the current economic headwinds and grow sustainably over the long term due the bank having (1) the most diversified ecosystem in our coverage, (2) dynamic customer acquisition resulting from an ongoing investment in digitalization, (3) a top-tier CASA ratio, and (4) a strong provisioning buffer.