MBB_Company update_Jan 2023

Increased loan growth assumption. We raise our 2023E loan growth forecast for MBB by +2ppt to 19% YoY versus our previous forecast of 17% YoY. This drives a +12% increase in our 2023E net interest income forecast to VND41 tn (+21% YoY). We forecast NIM to reach 5.67% in 2023E (+22bps YoY).

9M22 net fee income was VND2.9 tn, completing only 53% of our overly optimistic 2022E forecast. We reduce our net fee income forecast by -18% to VND4.5tn (implying growth of +3% YoY) in 2022E and by -25% to VND5.2 tn (+16% YoY) in 2023E.

We cut our provisioning forecast by -11% given MBB’s relatively high LLR coverage of 208%.

MBB has the sector’s highest exposure to corporate bonds (7.5% of total assets as at 3Q22), which has understandably elicited concern among investors and is probably the key reason for the low P/B valuation. Specifically, MBB’s exposure to Novaland (NVL VN) represents 1.7% of total assets: Please see page 5 for sensitivities.

Net-net, we raise our PATMI forecasts by +9% for 2023E, implying 2023 earnings growth of +18% YoY.

Yuanta versus the consensus. Our PATMI forecasts are now above the consensus mean by 8% for 2023E, largely due to higher credit growth and reduced provisioning assumptions.

Maintain BUY. MBB trades at 0.8x 2023E P/B versus the sector median of 1.0x despite 2023E ROE of 23%, which is higher than the sector median of 18% (Bloomberg consensus).

We raise our target price to VND25,480, implying 1.1x 2023E P/BV and 12-month TSR of 42%. We reiterate our BUY recommendation.

For the complete report, please access here: MBB_Company Update_Jan 2023

Analyst: Tanh Tran, tanh.tran@yuanta.com.vn