FREE

CTG - Attractive Valuation Among System-Leading Banks

Q4-FY25 and 2025 results: Profit Surge Driven by Provision Cost Control
• Q4-FY25 PBT reached VND 13.9 trillion (+14% YoY), bringing full-year 2025 PBT to VND 43.4 trillion (+37% YoY). Growth outpaced total operating income growth (Q4-FY25: 10%, FY2025: 7%), driven by a sharp decline in provision expenses — down 86% QoQ and 37% vs. FY2024.
• Credit growth had nearly reached the full-year quota by end-Q3-FY25, leaving Q4-FY25 loan growth essentially flat QoQ at 15.6% YTD.
• Q4-FY25 NIM improved 5 bps QoQ to 2.64%, rising for the second consecutive quarter. Full-year ROAA and ROAE reached 1.3% and 21.2%, respectively — a notable improvement from 1.1% and 18.3% in FY2024.
• NPL ratio remained stable QoQ at 1.10%, down 12 bps vs. FY2024. NPL coverage maintained a solid 159%. NPL recoveries income reached VND 10 trillion, up 31% YoY.
Outlook for Q1-FY26 and 2026
• For Q1-FY26, we forecast credit growth of 2.8% YTD (matching Q1-FY25's quota ceiling), equivalent to 13.6% YoY growth. NIM is expected to dip 10 bps QoQ to 2.55% as year-end 2025 pipeline loans are disbursed and higher funding costs in Q1-FY26 are yet to be reflected in loan pricing. Projected net interest income of VND 17,500 bn, +13% YoY. Credit cost forecast of 0.27%, rising from the abnormally low 0.02% in Q4-FY25. We expect CTG to rebuild provisions after the deliberate year-end drawdown. Given the low base from Q1-FY25 (PBT of VND 6.8 trillion), PBT growth is still projected at +55% YoY. TTM ROAE reaches 22.0%, up 370 bps QoQ. We note that our forecast does not include income from the Vietinbank Tower sale.
• For FY2026, we project credit growth decelerating to 14.3%, impacted by higher interest rates and policy restraint on real estate lending. NIM is expected to edge up 5 bps YoY to 2.7%, supporting NII growth of 19% YoY to VND 78,900 bn. Combined with 14% YoY non-interest income growth, total operating income is projected to grow 18% YoY. CIR is forecast at 30% and credit cost down 10 bps to 0.85%. PBT growth forecast at a strong 24% YoY.
View and Recommendation
We maintain our BUY recommendation on CTG with a revised target price of VND 44,800/share, down 3% from our previous target, reflecting an increase in our assumed cost of equity to account for a rise in 5-year and 10-year risk-free rates of +80 bps YTD and +20 bps YTD, respectively. We maintain our target P/B multiple of 1.60x in this update, based on a projected average ROE of 20.0% for the FY2026F–31F period (vs. 17.8% for 2020–25).
CTG's current valuation is quite attractive following the prolonged correction from early 2026, with trailing P/B of 1.52x — approximately at the 5-year average — and 2026F forward P/B of just 1.26x, a 3-year low. This valuation is in line with the sector average but does not yet adequately reflect CTG's superior ROE (FY2026F: 21.5%) and sector-leading asset quality.%