- 2024-07-30T00:00:00
- Company Research
STB released its H1 2024 results with TOI of VND14.0tn (USD561mn; +3.6% YoY) and PBT of VND5.3tn (USD214mn; +12.3% YoY), fulfilling 41% and 47% of our respective FY2024 forecasts. Bottom-line growth was broadly in line with our projection due to lower-than-expected provision expenses outweighing weak pure NFI and recovery income. On a QoQ basis, Q2 2024 PBT increased 3%. We see no material changes to our earnings forecasts for STB, pending a more extensive review.
- H1 2024 credit growth was 7%, slightly higher than the system-wide level of around 6%. Most of the loans were distributed to terms of less than one year.
- 6M 2024 customer deposit growth was slightly higher than credit growth of 7.5%. In Q2 2024, STB’s CASA ratio slightly improved to 18.8% (+1.8 ppts YoY & +3 bps QoQ).
- H1 2024 NIM decreased 33bps YoY to 3.93% vs our full-year forecast of 4.01%. On a QoQ basis, after two quarters of improving in NIM, STB’s Q2 2024 NIM decreased 10 bps. We attribute this to the weak credit demand of retail customers and strong competition among banks which led to STB’s asset yield decreasing more than its funding cost.
- H1 2024 NOII was VND2.0tn, flat YoY and fulfilling 26% of our full-year forecast. We believe this is due to (1) continual weak bancassurance sales and (2) low recovery income from written-off bad debts. We expect STB to record around VND2tn recovery income from the proceed of the sale of debts related to Phong Phu Industrial Park in H2 2024.
- H1 2024 CIR surged to 53.8% (+6.0 ppts YoY) compared to our full-year forecast of 44.8%. We expect that the stronger recovery income in H2 2024 will support a reduction in STB’s 2024F CIR.
- STB’s Q2 2024 asset quality deteriorated QoQ with the NPL ratio reaching 2.43% (+64 bps YoY & +15 bps QoQ) and Group 5 loans witnessing a jump of 33.9% QoQ. However, a positive sign was STB’s Group 2/gross loans decreasing 15 bps QoQ, therefore, we believe STB’s NPL ratio will lower in H2 2024.
- STB’s net VAMC balance as of Q2 2024 was VND623bn vs VND1.8tn in Q4 2023. STB did not book additional provision expenses for VAMC which reduced the credit costs for the bank in H1 2024 vs H1 2023.
- H1 2024 provision expenses decreased 50.7% YoY with the annualized credit cost at 0.44% (vs 0.76% in 2023). In addition, STB’s LLR was 69.7% in Q2 2024 (-7.4 ppts YoY & -2.8 ppts QoQ).
STB’s consolidated H1 2024 results
VND bn | H1 2023 | H1 2024 | YoY | Q2 2023 | Q2 2024 | YoY |
NII | 11,588 | 12,067 | 4.1% | 5,751 | 6,117 | 6.3% |
Non-interest income | 1,950 | 1,962 | 0.6% | 986 | 1,038 | 5.3% |
OPEX | (6,465) | (7,544) | 16.7% | (3,049) | (4,001) | 31.2% |
PPOP | 7,072 | 6,485 | -8.3% | 3,688 | 3,153 | -14.5% |
Provision expenses | (2,317) | (1,143) | -50.7% | (1,316) | (465) | -64.6% |
NPAT-MI | 3,825 | 4,288 | 12.1% | 1,925 | 2,177 | 13.1% |
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Loan growth** | 5.0% | 7.0% | 2.0 ppts | 2.7% | 3.2% | 0.5 ppts |
Deposit growth** | 10.3% | 7.5% | -2.8 ppts | 4.8% | 3.0% | -1.8 ppts |
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NIM | 4.26% | 3.93% | -33 bps | 4.18% | 3.74% | -44 bps |
Interest-earning asset yield | 10.51% | 8.31% | -220 bps | 10.65% | 7.58% | -307 bps |
Cost of funds | 6.42% | 4.46% | -196 bps | 6.62% | 4.03% | -259 bps |
CASA ratio* | 17.4% | 18.8% | 1.4 ppts | 17.0% | 18.8% | 1.8 ppts |
CASA ratio plus term deposits in FX | 18.7% | 20.4% | 1.7 ppts | 18.7% | 20.4% | 1.7 ppts |
CIR | 47.8% | 53.8% | 6.0 ppts | 45.3% | 55.9% | 10.6 ppts |
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NPLs / Gross loans | 1.79% | 2.43% | 64 bps | 1.79% | 2.43% | 64 bps |
Group 2 loans / Gross loans | 1.16% | 0.70% | -46 bps | 1.16% | 0.70% | -46 bps |
Accrued interest / IEAs | 0.96% | 0.82% | -14 bps | 0.96% | 0.82% | -14 bps |
Source: STB, 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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