Analyst Pin-board: HDB - 1Q2020 updates – Growth still driven by NII
HDB achieved a moderate earnings growth in 1Q (+13.5% YoY), mainly driven by the impressive expansion of net interest income, while other income streams were somehow limited under unfavorable economic conditions. We note that in 1Q the bank has escalated some reserves for trading & investment securities, operating expense and provision expense in case of worsen virus situation. For 2020, we expect net interest income momentum to remain strong, but service income would be more quite at least until the exclusive bancassurance agreement is finalized. We also expect that the bank’s relatively prudent provisioning in 1Q would be able to moderate the virus impact on bottom line in the subsequent quarters. We forecast 2020E earnings growth at 16.4% YoY, giving an EPS 2020f of VND 4,293.
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