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VCB – Positive Profit Growth Outlook with Clear Drivers for NIM Improvement

• VCB reported a PBT of VND 11.0 trillion in 2Q25, reflecting a +9% YoY and +2% QoQ increase, in line with expectations of VND 11.2 trillion. For the first half of 2025, PBT reached VND 21.9 trillion (+5% YoY), achieving 47% of the full-year forecast..
• The PBT growth in 2Q25 was primarily driven by a significant increase in income from the recovery of written-off bad debts (+560% YoY), FX trading income (+41% YoY), and a 48% YoY reduction in credit risk provisioning expenses. However, core net interest income remained flat due to NIM pressure, which contracted by 40 basis points (bps) YoY.
• ROAE slightly declined to 17.5% in 2Q25 (1Q25: 17.9%), marking the fourth consecutive quarter below 20%, reflecting slower profit growth. Book value per share (BVPS) stood at VND 25,600, corresponding to a current price-to-book (P/B) ratio of 2.51x.
• Business outlook highlights: VCB maintains its 16.3% credit growth target for 2025 and anticipates NIM improvement, driven by confidence in expanding its retail loan portfolio and increasing the proportion of medium- and long-term loans. The bank aims to enhance profit growth to restore ROAE to the 18-20% target range. The planned private placement to raise capital, initially targeted for potential completion by year-end, is now expected to be finalized next year.
• VCB’s one-year target price is set at VND 73,000 per share, based on projected PBT of VND 46.2 trillion (+9% YoY) for 2025F and VND 51.7 trillion (+2% YoY) for 2026F. Updated valuations and forecasts will be provided in subsequent reports.