- 2024-10-31T00:00:00
- Company Research
- VIB released its 9M 2024 results with TOI of VND15.2tn (USD609mn; -6.3% YoY) and PBT of VND6.6tn (USD261mn; -20.7% YoY), fulfilling 61% and 54% of our respective FY2024 forecasts. These results imply Q3 2024 PBT of VND2.0tn (-5.0% QoQ; -25.5% YoY). Overall, VIB’s 9M 2024 earnings tracked behind our expectations due to lower-than-expected top-line growth. We see potential downside to our current earnings forecasts, pending a more extensive review.
9M 2024 credit growth was 11.6% vs H1 credit growth of 4.6%. Q3 2024 loan growth was 6.7% QoQ. In 9M 2024, 81% of VIB’s lending portfolio was comprised of retail customers, in which 50% were mortgages, 21% were business loans, 12% were auto loans, and 17% were cards and other consumer loans. Additionally, corporate bonds accounted for only 0.1% of VIB’s credit exposure and were issued by manufacturing and services companies. VIB’s management expects Q4 2024 credit growth to reach 7-10%, contingent on receiving a higher credit room from the SBV, which is currently 18.4%.
9M 2024 customer deposit growth was 8.1% vs our full-year forecast of 14.0% YoY. In Q3 2024, VIB’s CASA ratio slightly decreased by 0.5 ppts QoQ but improved 1.4 ppts YoY to 14.4%.
9M 2024 NIM fell 122 bps YoY to 3.79%, below our full-year forecast of 4.54%. We attribute this decline to a sharper drop in IEA yield compared to the reduction in COF. Q3 2024 NIM contracted by 127 bps YoY to 3.73%, mainly because the bank supported clients via lower lending rates to increase credit demand as well as expand the SME segment.
9M 2024 NOII was VND2.6tn (+5.1% YoY), driven by (1) an 89.1% increase in net other income (mainly from recovery income of written-off bad debts of VND754bn), and (2) a 48.7% increase from FX trading activities, which offset a 23.8% decline in NFI. The bank expects write-off recovery income from bad debts to reach VND366bn (+12.6% YoY) in Q4 and VND1.5tn in 2025F.
9M 2024 CIR rose 5.4 ppts to 35.7% vs our full-year forecast of 31.2% amid a strong YoY increase in employee expenses, operating expenses for management, and investment in fixed assets. The bank aims to maintain a 2025F CIR of 30-33%.
Asset quality deteriorated QoQ with the NPL ratio increasing by 19 bps to 3.85% in Q3 2024 vs our full-year forecast of 2.94%. However, the Group 2 loan ratio dropped by 81 bps QoQ to 3.65%. Restructured loans under Circular 02 over gross loans was 0.1% vs 0.2% in Q2 2024. The bank expects the NPL ratio to gradually decrease towards the end of the year and expects to maintain the NPL ratio below 2.3% for 2024.
The annualized 9M 2024 credit cost was 1.49% (vs 2.65% in 2023). 9M 2024 provision expenses increased 2.5% YoY, completing 65% of our full-year forecast. VIB’s LLR was 47.1% in Q3 2024 vs 51.0% and 48.1% in 2023 and Q2 2024, respectively. The Q3 2024 annualized write-off rate over gross loans was 0.94% (vs 1.04% in Q2 2024).
VIB’s consolidated 9M 2024 results*
VND bn | 9M 2023 | 9M 2024 | YoY | Q3 2023 | Q3 2024 | YoY |
NII | 13,828 | 12,677 | -8.3% | 4,673 | 4,060 | -13.1% |
Non-interest income | 2,490 | 2,617 | 5.1% | 1,351 | 876 | -35.2% |
OPEX | (4,840) | (5,460) | 12.8% | (1,717) | (1,782) | 3.8% |
PPOP | 11,478 | 9,834 | -14.3% | 4,308 | 3,154 | -26.8% |
Provision expenses | (3,153) | (3,231) | 2.5% | (1,625) | (1,156) | -28.9% |
NPAT-MI | 6,660 | 5,283 | -20.7% | 2,147 | 1,599 | -25.5% |
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Loan growth*** | 5.9% | 11.7% | 5.8 ppts | 4.7% | 6.7% | 2.0 ppts |
Deposit growth*** | 6.7% | 8.1% | 1.4 ppts | 4.0% | 3.2% | -0.8 ppts |
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NIM | 5.01% | 3.79% | -122 bps | 5.00% | 3.73% | -127 bps |
Interest-earning asset yield | 10.48% | 7.36% | -312 bps | 9.67% | 7.39% | -228 bps |
Cost of funds | 6.11% | 4.02% | -209 bps | 5.20% | 4.13% | -107 bps |
CASA ratio** | 12.1% | 14.4% | 2.3 ppts | 13.0% | 14.4% | 1.4 ppts |
CASA ratio plus term deposits in FX | 14.6% | 18.9% | 4.2 ppts | 15.5% | 18.9% | 3.3 ppts |
CIR | 30.3% | 35.7% | 5.4 ppts | 28.5% | 36.1% | 7.6 ppts |
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NPLs / Gross loans | 3.63% | 3.85% | 22 bps | 3.68% | 3.85% | 17 bps |
Group 2 loans / Gross loans | 6.42% | 3.65% | -277 bps | 6.45% | 3.65% | -280 bps |
Accrued interest / IEAs | 0.93% | 0.55% | -38 bps | 1.01% | 0.55% | -47 bps |
Source: VIB, Vietcap — * In Q3, banks reclassified certain income related to LC from fee income to interest income, aligning with the new Credit Institution Law. **CASA volume included demand deposits and margin deposits; ***Q3 2023 and Q3 2024 loan and deposit growth is QoQ growth; 9M 2023 and 9M 2024 loan and deposit growth is 9M growth.
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