- 2024-05-02T00:00:00
- Company Research
STB released its Q1 2024 results with TOI of VND6.9tn (USD275mn; +1.1% YoY) and bottom-line net profit of VND2.1tn (USD85mn; +11.1% YoY), fulfilling 20% and 23% of our respective FY2024 forecasts. The bottom-line growth was broadly in line with our projection thanks to lower-than-expected provision expenses outweighing weakness in bancassurance income and recovery income. On a QoQ basis, Q1 2024 NPAT decreased 7%. We see no material change to our earnings forecasts for STB, pending a more extensive review.
- 3M 2024 credit growth was 3.7%, higher than the system-wide level of around 1% and the same as ACB. Most of the loans were distributed to terms of less than one year. We note that both STB and ACB have a large proportion of loan balance to households’ business customers.
- 3M 2024 customer deposit growth was slightly higher than credit growth at 4.4%. In Q1 2024, STB’s CASA ratio was flat YoY and QoQ at 18.5%.
- Q1 2024 NIM rose 5 bps QoQ to 3.85% vs our full-year forecast of 4.03%. STB’s NIM has improved for two quarters after hitting the bottom of 3.38% in Q3 2023. We attribute this to STB’s customer deposits continuing to roll over to lower deposit rates.
- Q1 2024 NOII was VND924bn (-14.1% QoQ and -4.1% YoY), fulfilling 11% of our full-year forecast. We attribute this to (1) continual weak bancassurance sales and (2) low recovery income from written-off bad debts. However, we expect STB to record stronger recovery income due to the successfully sold debts related to Phong Phu Industrial Park.
- Q1 2024 CIR was flat QoQ and YoY at 51.5%. We believe that the stronger improvement in NIM and NOII over the remainder of 2024 will support 2024F CIR to reduce to 43.5%.
- Q1 2024 asset quality slightly deteriorated QoQ with Group 2/gross loans increasing 13 bps QoQ to 0.85% and the NPL ratio was 2.28%, the same as the NPL ratio in Q4 2023. STB recorded minimal write-offs in 2023 and Q1 2024. STB still has a net VAMC balance of VND1.4tn as of Q1 2024 vs VND1.8tn in Q4 2023.
- Q1 2024 provision expenses decreased 32% YoY with the annualized credit cost at 0.54% (vs 0.80% in 2023). In addition, STB’s LLR was 72.5% in Q1 2024 (+3.7 ppts QoQ; -31.3 ppts YoY).
STB’s consolidated Q1 2024 results
VND bn | Q1 2023 | Q1 2024 | YoY |
NII | 5,837 | 5,951 | 2.0% |
Non-interest income | 964 | 924 | -4.1% |
OPEX | (3,416) | (3,543) | 3.7% |
PPOP | 3,384 | 3,332 | -1.5% |
Provision expenses | (1,002) | (678) | -32.3% |
NPAT-MI | 1,900 | 2,111 | 11.1% |
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Loan growth** | 2.2% | 3.7% | 1.5 ppts |
Deposit growth** | 5.3% | 4.4% | -0.9 ppts |
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NIM | 4.40% | 3.85% | -55 bps |
Interest-earning asset yield | 10.48% | 8.07% | -241 bps |
Cost of funds | 6.22% | 4.41% | -181 bps |
CASA ratio* | 17.4% | 18.5% | 1.1 ppts |
CASA ratio plus term deposits in FX | 19.2% | 20.2% | 1.0 ppts |
CIR | 50.2% | 51.5% | 1.3 ppts |
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NPLs / Gross loans | 1.19% | 2.28% | 109.0 bps |
Group 2 loans / Gross loans | 0.94% | 0.85% | -9.0 bps |
Accrued interest / IEAs | 0.97% | 0.87% | -10.0 bps |
Source: STB, Vietcap — *CASA volume included demand deposits and margin deposits; ** Q1 2023 and Q1 2024 loan and deposit growth is QoQ growth.
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