CTG – Strengthening Asset Quality for a New Growth Phase
- In Q2 2023, total operating income (TOI) reached VND 17.7 trillion (+11.5% YoY) due to the net interest income (NII) being VND 12.7 trillion (+6.6% YoY), combined with a high growth in non-interest income, totaling VND 5 trillion (+26% YoY). For the first half of 2023, the total TOI and profit before tax (PBT) were VND 34.8 trillion (+15.9% YoY) and VND 12.5 trillion (+8% YoY) respectively, achieving about 54% of the bank's 2023 profit plan.
- The non-performing loan (NPL) ratio is well-controlled at 1.27% compared to 1.28% in Q1 2023. Group 2 loans decreased to 2.59% compared to the previous quarter. CTG has also made provisions of VND 6.4 trillion in Q2 (+10% YoY and -4% QoQ). As a result, CTG's loan loss reserve (LLR) was maintained at 168.9% compared to Q1.
- For the second half of the year, the net interest income is expected to grow by 12% compared to the first half (+10% YoY), providing a boost to TOI (+5% YoY and +4% HoH). In a conservative scenario, it is expected that the bank will maintain cost provisions at a level equivalent to the first half, which is VND 12 trillion. Therefore, the estimated PBT for the second half is VND 12.1 trillion (+28% YoY), remaining stable compared to 1H 2023. For the full year, TOI and PBT are estimated to be VND 71.1 trillion (+10.9% YoY) and VND 24.7 trillion (+18% YoY) respectively. Projected net profit and earnings per share (EPS) are VND 19.8 trillion and VND 3,632, respectively.
- CTG is currently trading at a P/B ratio of 1.2, which is a 12% discount to the 5-year average of 1.34, making it an attractive valuation compared to the P/B ratios of other state-owned commercial banks. Therefore, at a target price of VND 34,900/share, corresponding to a forward P/B of 1.12 in 2023, it is recommended to buy CTG shares for medium to long-term holding
Vietnam Joint Stock Commercial Bank for Industry and Trade (Vietinbank) is a Vietnam-based and state-owned financial institution. The Bank provides commercial banking services for individuals and corporate clients. It is also engaged in the provision of international clearing services and money transfer services. Moreover, the Bank provides derivative products, such as futures, forwards, swaps and options. Other operations include financial leasing activities and the offering of guarantee services, insurance services and securities related services.
Viet Dragon Securities belongs to top 20 biggest securities companies in terms of chartered capital in Vietnam. With a qualified, dedicated and professional team, a widespread network, advanced technology, diversified products and services, and good relationship with local and foreign institutions, we provide a wide range of services and products to our clients both individuals and institutions, both local and foreign. We commit to provide our clients with promising investment opportunities and a comprehensive and professional financial investment services.
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