• We attended MBB’s AGM on April 19. The meeting’s main agenda was to propose 2024 guidance and seek shareholder approval for dividend plans. The Q&A section focused on MBB’s outlook, risk appetite, and credit exposure to some specific corporates.
• 2024 guidance includes credit growth of 15%-16% YoY (final growth subject to the State Bank of Vietnam’s (SBV) decision), the NPL ratio to be kept below or equivalent to 2.0%, and profit before tax (PBT) of VND27.9tn-VND28.4tn (~USD1.1bn; +6%-8% YoY) vs our forecast of VND31tn (+18% YoY). Additionally, CIR is targeted to be controlled at below 30% and CASA ratio to be maintained at around 40%. MBB stated that more conservative PBT growth this year is partly due to its intention to strengthen its provisioning buffer and potential pressure on NIM. MBB targets to control LLR above 100% in the long term. 
• Preliminary Q1 2024 PBT: VND5.8tn (-11% YoY), completing 19% of our full-year forecast. The bottom line is in line with our expectation. Q1 2024 credit growth was slow at 0.23% (current credit quota is 15.6%).
• MBB’s average lending rates have decreased 1-1.5 ppts YoY. The bank expects the lending rates to be flat or increase toward the end of the year. 
• MBB guides for 2024-2029 profit growth of around 12% per year. 
• MBB proposed (1) a stock dividend plan of 15% of outstanding shares and (2) a cash dividend of 5% (VND500/share) using 2023 retained earnings. The 2024F dividend plan is to be 10%-20%. 
• MBB proposes to continue issuing 62mn shares to its strategic partners in Q2 2024 - 2025. We note that this is the remaining part of MBB’s private placement plan proposed in 2023 including (1) 70mn shares to Viettel Group and (2) 65mn shares to professional investors. In March 2024, MBB completed issuing (1) 43mn shares (out of 70mn shares) to Viettel Group and (2) 30mn shares (out of 65mn shares) to State Capital Investment Corporation (SCIC).
• We currently have a BUY rating for MBB with a target price of VND28,500/share.

No credit exposure to SCB; credit exposure to NVL and Trung Nam Group is under control. MBB currently finances three projects of Trung Nam Group (Thuan Bac, Thuan Nam, and Tra Vinh). Though the cash flows are slow, all these projects have FIT prices, and the bank is still confident in the payment ability of this customer. MBB also expects new positive developments in NVL’s projects financed by the bank in Q2 2024 given the Government’s support. The bank stated that NVL’s situation has improved in the last few quarters.

MBB to expand customer base further and improve revenue contribution via digital platforms. MBB targets to serve 30 million customers by the end of 2024 and 40 million customers by 2029. MBB currently has 26 million customers with an active rate of more than 60%. MBB targets to (1) expand its network to the central and the south of Vietnam with an investment of less than 20% of its charter capital and (2) increase the revenue contribution via digital platforms to 50% in 2026 (vs 24.4% in 2023). MBB plans to sell up to a 49% stake of MB Cambodia to a strategic investor with an aim to better understand the local business environment and customize its business.  MB Cambodia was launched in early January 2023 with charter capital of USD100mn after operating the banking business in Cambodia since 2011 as a branch of MBB. 

MBB expects a strong rebound at MCredit. Management expects MCredit’s 2024F PBT to increase more than 100% YoY from a low base in 2023. MCredit’s 2023 PBT was around VND300bn, trailing its 2023 management guidance of VND1.3tn. MBB stated that the company has been actively (1) restructuring its bad debt collection activities (shifting to in-house services) and (2) changing its lending strategy via prioritizing accessing the customer base of the group via digital platforms for better credit appraisal rather than looking for new customers in person. 

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