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HDB - Solid growth prospects

We have conducted a valuation for HDB stock and estimate its fair value at VND 31,000, corresponding to projected P/B multiples for 2025F and 2026F of 2.1x and 1.7x, respectively.
Superior credit growth potential is driven by (1) receiving a high credit growth quota upon the mandatory transfer of the weak credit institution Dong A Bank, (2) a solid capital buffer and ample liquidity headroom, and (3) the strategy to boost lending to large corporates.
Diversified income sources coupled with high profitability help HDB consolidate its competitive advantage.
Besides NIM expansion supported by the recognition of additional fees from credit activities (undrawn commitment fees, credit granting fees, etc.), HDB maintains positive growth momentum in non-interest income by expanding products, services and effectively exploiting the HD Financial Group ecosystem, with notable contributions from insurance services and corporate advisory services.
HDB meeting the minimum charter capital requirement of VND 50 trillion opens up opportunities to participate in gold dealing activities, thereby diversifying income sources beyond traditional credit.
With the trend of expanding and completing the ecosystem, HDB is expected to soon increase its ownership stake in HD Securities (current ownership is 30%), turning this securities company into a subsidiary. Furthermore, HD Securities plans to establish HD Crypto Asset Exchange JSC in the context that the government is preparing to pilot the crypto asset market in Vietnam, bringing opportunities to pioneer in the digital finance field, expand securities investment activities into new asset classes, and increase the value of the HDB ecosystem in the long term.
Valuation. We maintain a positive view and appreciate the PBT and ROE growth prospects of HDB (which is in the leading group of the sector) based on the potential to rapidly expand credit scale and develop non-interest income sources.
At the same time, the possibility of a private placement to strategic investors is viewed as an attractive story for HDB stock in the medium term, as the bank still has approximately 22% remaining foreign room (This ratio has been raised from 17.5% to 27% in 2025 and can be expanded up to a maximum of 49% under the preferential mechanism for banks participating in the restructuring of weak credit institutions).
Risks. Asset quality deterioration in the household business segment in the agriculture sector due to the unfavorable economic environment, leading to provisioning pressure.