MBB_Company Update_Nov 2021

Cheap valuation for a high quality bank

Increased loan growth assumption. We raise our 2022E loan growth forecast for MBB by 2ppt to 17% YoY versus our previous forecast of 15% YoY. Net interest income forecast increased by 11% for 2022E to reach VND31 tn (+18% YoY).

NIM forecast increased by 26bps versus our previous forecast to reach 5.32% (+17bps YoY) for 2022E on increasing retail lending contribution and high CASA ratio.

Fee income forecast raised 5% vs. our previous forecast to reach VND5.5 tn (+24% YoY) in 2022E.

Cost efficiency to improve driven by digitization. We expect adj. CIR (exclude NPL recoveries) to reach 37% in 2022E (-2ppt YoY).

2022E provisioning forecast increased by 28% versus previous forecast due to the 3Q21 Covid impact to reach VND7.8 tn (+6% YoY). However, MBB’s high LLR ratio gives it more flexibility than most banks to reduce provisioning and boost future earnings.

Net-net, we raise our PATMI forecasts by +17% for 2022E, implying PATMI growth of 27% YoY.

Yuanta versus the consensus. Our PATMI forecasts are now above the consensus mean by 10% for 2022E.

Reiterate BUY. MBB trades at 1.5x 2022E P/B versus the sector median of 1.7x its 2022E ROE forecast of 22%, which is higher than the sector median of 20% under our assumptions.

We raise our target price to VND39,350, implying 1.8x 2022E P/BV and 12-month TSR of 27%. We reiterate our BUY recommendation and maintain MBB as among our top picks in the bank sector.

For the complete report, please access here: MBB_Company Update_Nov 2021

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