Equity Analysis /

TCB: 2022/2023 outlook – Expect solid growth amid headwinds

  • Maintaining NIM via balance sheet structure and maturity transformation during rate hike pressure

  • 2022/2023 outlook: Sustained quality growth, yet tight headroom for breakthroughs

  • We maintain our target price of VND 71,000/share and a Buy recommendation. This translates to an upside of 41%.

Rong Viet
3 March 2022
Published byRong Viet

We see factors that will support NIM during the deposit rate increases. Implicit costs on CASA, including technology investments and promotion expenses should be considered when assessing the stability and growth potential of these non-maturity deposits.

The company's 2021 operating results were in line with our forecasts. We make changes in the medium-term growth projections given the faster-than-expected improvement of CASA and yields. We also incorporate the company's ongoing diversification of the funding structure towards offshore borrowings and the potential positive impact of the socio-economic recovery to the balance sheet forecasts. The new 2022 PBT estimate is down 1% from the prior one, at VND29.1tn (US$1.3bn, 25% yoy).

The revised forward 2022 book value per share is VND32,721, indicating a forward P/B of 1.5. This presents an attractive risk reward balance despite the lack of short-term catalysts and concerns about NIM.

We maintain the target price of VND71,000/share and a Buy recommendation. This translates to an upside of 41% from the closing price of 1 March 2022.