{"id":57713,"date":"2020-04-27T09:44:05","date_gmt":"2020-04-27T02:44:05","guid":{"rendered":"https:\/\/yuanta.com.vn\/?post_type=phan-tich&p=57713"},"modified":"2020-06-26T15:30:11","modified_gmt":"2020-06-26T08:30:11","slug":"mbb_1q20-earnings-11-4-yoy","status":"publish","type":"phan-tich","link":"https:\/\/yuanta-uat.ysvn.com.vn\/en\/analysis\/mbb_1q20-earnings-11-4-yoy","title":{"rendered":"MBB_1Q20 earnings -11.4% YoY"},"content":{"rendered":"

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

TP upside (downside) +61%
\nClose 24 Apr 2020
\nPrice \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 VND 16,050
\n<\/strong>12M Target \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/strong>VND 25,900<\/strong><\/p>\n

 <\/p>\n

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

MBB reported 1Q20 PATMI of VND1.7 tn<\/strong> (-8.4% QoQ\/-11.4% YoY). The earnings decline was largely due to the +72.3% QoQ\/+117.0% YoY rise in credit costs. MBB has achieved 19% of Bloomberg consensus for 2020E and 20% of our estimate<\/p>\n

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

Loans decreased by -0.9% YTD<\/strong>. 1Q20 Net interest income was VND4.7 tn (-4.0% QoQ\/+13.6% YoY).<\/p>\n

CASA deposits declined<\/strong> by -23.9% QoQ. As at 1Q20, MBB\u2019s CASA ratio was 33.1%, down 5.3ppt vs. 2019A. However, this appears to be a seasonal factor as special purpose deposits doubled QoQ in 4Q19. MBB\u2019s CASA ratio is still the highest in the sector.<\/p>\n

1Q20 net fee income <\/strong>was VND745 bn (-14.7% QoQ\/-1.8% YoY). Net gain from FX and gold dealing was VND159 bn (-9.2% QoQ\/ +32.5%YoY). Notably, net income from securities trading and investment was VND498 bn (+131% QoQ\/ +175% YoY).<\/p>\n

Asset quality. <\/strong>Provisioning increased by +72.3% QoQ and +117.0% YoY to reach VND2.1 tn in 1Q20. MBB\u2019s NPL ratio of 1.62% was up +46bps QoQ and +21bps YoY. Category 4 NPLs of VND1.7 tn was up 92.8% QoQ, and category 5 NPLs was up 46.6% QoQ to reach VND 406 bn in 1Q20. The bank\u2019s loan loss reserve (LLR) ratio was 98% (-12ppt QoQ\/ but +2ppt YoY).<\/p>\n

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

Earnings forecasts for 2020E appear stretched<\/strong> as MBB achieved only 20% of our 2020E earnings forecast (which we recently revised down in our April report<\/a>) and 2Q20 will likely be worse for earnings.<\/p>\n

Credit costs & LLR are keys to monitoring asset quality in 2020. <\/strong>We think the bank\u2019s increased provisioning reflect a prudent approach to preparing for potential future losses. However, its LLR ratio decreased due to rising NPLs. This is noteworthy given the SBV\u2019s order to avoid reclassifying loans to borrowers who have been impacted by COVID-19. In any case, we believe that MBB will continue to further increase provision to build up stronger buffer to weather the probable continued asset quality deterioration in upcoming quarters.<\/p>\n

We maintain our BUY recommendation<\/strong>. MBB trades at 0.8x 2020E P\/B, and with FOL premiums having declined this represents value even if our 19% ROE forecast for 2020E faces moderate downside risk.<\/p>\n

Please access here for the complete report: MBB_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) +61% Close 24 Apr 2020 Price \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 VND 16,050 12M Target \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 VND 25,900   Event MBB reported 1Q20 PATMI of VND1.7 tn (-8.4% QoQ\/-11.4% YoY). The earnings decline was largely due to the +72.3% QoQ\/+117.0% YoY rise in credit costs. MBB has achieved 19% of Bloomberg consensus for 2020E and…<\/p>\n","protected":false},"author":10,"featured_media":0,"template":"","class_list":["post-57713","phan-tich","type-phan-tich","status-publish","hentry"],"acf":[],"yoast_head":"\nMBB_1Q20 earnings -11.4% YoY | Yuanta Vietnam<\/title>\n<meta name=\"description\" content=\"BUY TP upside (downside) +61% Close 24 Apr 2020 Price \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 VND 16,050 12M Target \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 VND 25,900   Event MBB reported 1Q20\" \/>\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=\"MBB_1Q20 earnings -11.4% YoY\" \/>\n<meta property=\"og:description\" content=\"BUY TP upside (downside) +61% Close 24 Apr 2020 Price \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 VND 16,050 12M Target \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 VND 25,900   Event MBB reported 1Q20\" \/>\n<meta property=\"og:url\" content=\"https:\/\/yuanta-uat.ysvn.com.vn\/en\/analysis\/mbb_1q20-earnings-11-4-yoy\" \/>\n<meta property=\"og:site_name\" content=\"Yuanta Vietnam\" \/>\n<meta property=\"article:modified_time\" content=\"2020-06-26T08:30:11+00:00\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data1\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" 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