Earnings Report /
Vietnam

Asia Commercial Bank: 2022/2023 outlook – Capturing retail advantage with digitalisation

  • 2021 review: Volatility from supportive interest rate policies

  • Capitalising on the retail funding base to maintain funding costs

  • 2022/2023 outlook: De-escalation of risk as a major growth factor; Buy

Thanh Nguyen
Rong Viet
18 March 2022
Published by

ACB's 2021 results were slightly below our expectations. NII was up to our projections, but TOI and PBT missed our estimates. We appreciate the quality improvement in CASA base and the conservative provisioning policy for restructured debts.

The bank's 2022-2023 PBT forecasts are almost unchanged despite the lower-than-expected 2021 results, landing at VND15.4tn (US$669mn, 28% yoy) and VND18.7tn (US$813mn, 22% yoy), respectively for 2022 and 2023. ACB's 2023 revenue is revised upward by 3%. We anticipate pressure on CIR as ACB allocates more funds to technology investments and incurs operating costs to maintain a high CASA base. We maintain our projections on the 2022-2025 credit cost margin curve.

The revised forward 2022 book value per share is VND20,478, translating to a forward P/B of 1.6x. We maintain a target price of VND42,000/share and a Buy recommendation. This translates to an upside of 28% from the closing price of 18 March 2022.