VIB released Q1 2023 results with PPOP of VND3.4tn (USD142mn; +25.6% YoY) and NPAT-MI of VND2.2tn (USD91mn; +18.2% YoY), achieving 24.8% and 22.5% of our FY2023 forecasts, respectively. The increase in the bottom line was mainly thanks to a 22.4% YoY increase in NII, which was partly offset by (1) a 4.5% YoY decrease in pure NFI and (2) 68.2 % YoY increase in provision expenses. We see slight downside risk to our earnings forecasts for VIB, pending a fuller review.

Negative credit growth and deposit growth in Q1 2023. VIB’s credit balance dropped 1.3% QoQ in Q1 2023 vs system-wide credit growth of 2.1% QoQ, which was contributed by a 1.2% QoQ decrease in gross loans and 20.0% QoQ decrease in the corporate bond balance. As of Q1 2023, VIB’s corporate bond balance accounted for only 0.6% of the bank’s credit balance. Meanwhile, Q1 2023 deposits from customers were relatively flat (-0.4% QoQ), with deposits from individuals increasing 4.1% QoQ and deposits from institutions decreasing 10.7% QoQ.