Analyst Pin-board TCB – 1Q22 review: Well-controlled credit costs as a counterpressure
- TCB delivered good growth in 1Q22 amid rising concern about the pressure on the NIM front, which extended both on a year-over-year and quarter-over-quarter basis. Total operating income grew 13% YoY despite solid net interest income and net fee income growth (32% YoY and 35% YoY respectively). TCB wrote down the value of its bond holding, which impacted the other non-interest income and solely made PBT down by 14% YoY. It should be reversed in the next quarter given the new decree. CIR was stagnant while credit cost margin kept falling as expected. Lower provisions helped counter the impact of other non-interest income.
- Our 2022 PBT forecast is VND 29.1 tn. The 1Q22 results fulfilled 23% of our full-year estimation. The forward 2022 book value per share is VND 32,721, translating to a forward P/B of 1.1x. The bank’s historical P/B average is 1.7x. Compared to the time of listing, TCB’s forward ROE improved structurally from circa 17% to 22% this year. Given weak sentiment towards the bank and the recent re-rating on a sector-wide basis, we decline the market valuation component and thereby, revising down our target price by 5% to VND 67,700/share. This is equivalent to a BUY recommendation with an upside of 85% from the closing price of May 25, 2022.
Vietnam Technological and Commercial Joint Stock Bank (Techcombank) is a Vietnam-based corporate bank. It is engaged in the provision of corporate banking services include customized account packages; fixed and non-fixed deposits; supply chain financing; trade finance services for import, export and domestic; international fund transfer; commodity brokerage services; foreign exchange services, such as foreign exchange swaps and foreign exchange derivatives, among others; as well as working capital loans. The Bank also offers personal banking products and services, such as credit and debit cards; individual loans of various types, including study, mortgage, household business, among others; personal banking accounts and services, including current accounts, payroll accounts and international transfer; Automated Teller Machine (ATM) and Point Of Service (POS) customer service support; and Internet and mobile banking.
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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