{"id":56361,"date":"2020-04-21T17:43:18","date_gmt":"2020-04-21T10:43:18","guid":{"rendered":"https:\/\/yuanta.com.vn\/?post_type=phan-tich&p=56361"},"modified":"2020-04-21T17:43:18","modified_gmt":"2020-04-21T10:43:18","slug":"vpb_1q20-boosted-by-trading-gains","status":"publish","type":"phan-tich","link":"https:\/\/yuanta-uat.ysvn.com.vn\/en\/analysis\/vpb_1q20-boosted-by-trading-gains","title":{"rendered":"VPB_1Q20 boosted by trading gains"},"content":{"rendered":"

BUY<\/span><\/strong><\/p>\n

TP upside (downside) +31%
\nClose 21 Apr 2019
\nPrice \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 VND 19,550
\n<\/strong>12M Target (*)\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/strong>VND 25,530
\n<\/strong>(*) out TP is under review<\/em>\u00a0<\/em><\/p>\n

Event<\/strong><\/span><\/p>\n

VPB reported 1Q20 PATMI of VND2.3 tn<\/strong> (-8.0% QoQ but +62.8% YoY), largely due to the +331% YoY rise in income from securities trading and investment. VPB has achieved 24.3% of Bloomberg consensus and 23.9% of our forecast for 2020E.<\/p>\n

Details<\/span><\/strong><\/p>\n

Credit growth increased by just 2.6% YTD<\/strong>. The bank targets 15% credit growth for 2020E, while we estimate 12% YoY growth. Net interest income was VND8.0 tn (-0.5% QoQ\/ but +14.2% YoY).<\/p>\n

Net fees<\/strong> were VND695 bn in 1Q20 (-32.4% QoQ\/+33.4% YoY).<\/p>\n

Net gains from trading <\/strong>and investment jumped by +80% QoQ and +331% YoY to reach VND739bn. Other incomes (mostly loan loss recoveries) were down -27.2% QoQ but up +59.5% YoY to achieve VND451 bn in 1Q20.<\/p>\n

1Q20 NPL ratio was 3.03% (-39bps QoQ\/-59bps YoY<\/strong>). However, provisioning costs increased +0.5% QoQ and +15.8% YoY to reach VND3.7 tn in 1Q20. The bank\u2019s loan loss reserve (LLR) coverage ratio increased by +9ppt QoQ\/+7ppt YoY to reach 55% in 1Q20.<\/p>\n

Our view<\/strong><\/span><\/p>\n

Credit costs & LLR are key to monitoring asset quality in 2020. <\/strong>SBV\u2019s forbearance policies<\/a> reduce the information value of reported NPLs. Banks should be increasing provisions and loan loss coverage to prepare for future recognition of credit quality deterioration.<\/p>\n

However, VPB\u2019s current LLR coverage of 55% is low<\/strong> and the bank might need to increase provisions to weather the probable asset quality deterioration in upcoming quarters.<\/p>\n

Earnings forecasts for 2020E may be stretched<\/strong>. Credit growth, NIM, fee income, and provision costs will all be under pressure. Trading gains may not be sustained throughout the year.<\/p>\n

Low leverage and strong solvency capital should help\u00a0<\/strong>VPB<\/strong>\u00a0weather the storm.\u00a0<\/strong>The bank\u2019s asset leverage of 8.9x is the second lowest in Vietnam. Total CAR (Basel II) was 11.1% at 4Q19, and most of this is Tier 1 capital (10.7%).<\/p>\n

VPB<\/strong><\/a> trades at 0.9x 2020E P\/B<\/strong>. We forecast 2020E ROE of 21.5%. We are now reviewing our model as we reflect on the potential economic and policy impact of the outbreak, we believe that such a high ROE should still be achievable once the crisis impact is over.<\/p>\n

For the complete report, please access here:VPB_1Q20_Express note<\/a><\/p>\n

Analyst: Tanh Tran<\/strong>, tanh.tran@yuanta.com.vn<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

BUY TP upside (downside) +31% Close 21 Apr 2019 Price \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 VND 19,550 12M Target (*)\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 VND 25,530 (*) out TP is under review\u00a0 Event VPB reported 1Q20 PATMI of VND2.3 tn (-8.0% QoQ but +62.8% YoY), largely due to the +331% YoY rise in income from securities trading and investment. VPB has achieved 24.3%…<\/p>\n","protected":false},"author":10,"featured_media":0,"template":"","class_list":["post-56361","phan-tich","type-phan-tich","status-publish","hentry","analysis-category-company-update","analysis-category-financials"],"acf":[],"yoast_head":"\nVPB_1Q20 boosted by trading gains | Yuanta Vietnam<\/title>\n<meta name=\"description\" content=\"BUY TP upside (downside) +31% Close 21 Apr 2019 Price \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 VND 19,550 12M Target (*)\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 VND 25,530 (*) out TP is under review\u00a0 Event VPB\" \/>\n<meta name=\"robots\" content=\"noindex, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"VPB_1Q20 boosted by trading gains\" \/>\n<meta property=\"og:description\" content=\"BUY TP 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