VIB released 9M 2023 results with NPAT-MI of VND6.7tn (USD271mn; +6.5% YoY), achieving 69% of our FY2023 forecast. These results imply Q3 2023 NPAT-MI of VND2.1tn (-3.9% YoY & -9.0% QoQ). Overall, VIB’s bottom-line results marginally trailed our expectations mainly due to a higher-than-expected surge in credit costs. However, VIB’s NPL ratio remained high despite its aggressive write-off strategy in 9M 2023. 

- 9M 2023 credit growth was 5.5% vs the current quota of 14.25%. 86% of VIB’s lending portfolio was comprised of retail customers (vs 90% in 2022), in which 54% were mortgages, 16% were auto loans, 19% were SME loans, and 11% were cards and other consumer loans. The bank expects to use its remaining quota in Q4 2023 and spend around 10%-15% of new disbursements on corporate customers rather than fully focusing on retail customers as they did last year.  

- 9M 2023 customer deposit growth was nearly 7.0%. Short-term funding to medium and long-term lending as of Q3 2023 was 27.9% vs the current regulatory cap of 30% (effective from October 2023). VIB expects a new offshore syndicated loan of up to USD300mn to be disbursed in Q4 2023, which will help to enhance VIB’s long-term funding.    

- 9M 2023 NIM of 4.88% (+20 bps YoY) was slightly lower than our full-year forecast of 4.93%. Q3 2023 NIM was 4.62% (flat YoY & -25 bps QoQ).

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