STB – Pending for final approval from sbv for 32.5% stake sale – AGM Note

• We attended STB's annual general meeting (AGM) in HCMC on April 25. The main agenda was to (1) review 2024 business results, (2) approve 2025 targets, and (3) approve the direction to pay a stock dividend after finishing the bank’s restructuring plan.
• The Q&A session focused on (1) the process of selling debts related to Phong Phu, (2) the 32.5% stake pledged as collateral in favor of VAMC, and (3) the plan to acquire a securities company. 
• 2025 targets include (1) total asset growth of 10% YoY vs our full-year forecast of 15% YoY, (2) credit growth of 14% YoY which matches our expectation, (3) funding growth of 9% vs our full-year forecast of 14%, (4) the NPL ratio to be kept below 2.0% vs our full-year forecast of 2.0%, and (5) PBT of VND14.7tn (+15% YoY) vs our full-year forecast of VND17.6tn (+39.3% YoY). 
• We currently have a BUY rating for STB with a target price of VND50,000/share.

 STB sold Phong Phu’s debts at VND7.934tn in 2023 and has received 20% of the payment. STB expects to receive 40% of the payment in 2025, with the remaining balance to be paid in 2026, which is later than both our expectations and the payment plan published by STB in 2023. Additionally, STB has already recognized the 20% payment from Phong Phu in 2024 by reversing the provision for VAMC. Regarding the selling of Mr. Tram Be’s 32.5% stake, STB is still awaiting approval from the State Bank of Vietnam (SBV). 

STB will develop a detailed plan on stock dividends and an ESOP for employees, seeking shareholder approval through written consent after completing its restructuring program and obtaining approval from the SBV. Although STB included a proposal to pay stock dividends to shareholders in its 2025 AGM document, this does not necessarily mean the plan will be implemented in 2025.

STB plans to invest in or acquire a majority stake in a securities company, with an investment value of up to VND1.5tn. This move is aimed at expanding the bank’s ability to offer comprehensive financial products for both corporate and high-net-worth individual clients, as well as increasing its competitive edge. Additionally, the investment banking sector is seen as a growing source of income for the banking system. STB currently owns a 13.8% stake of SBS Securities, though the specific securities company it intends to target is not yet clear. 

STB’s Q1 2025 preliminary results: 3M credit growth and deposit growth were 4.7% and 3.3%, respectively. Q1 2025 NPL ratio slightly increased 20 bps QoQ to 2.2%. Additionally, Q1 2025 PBT achieved VND3.67tn (+38.6% YoY) and completed 21% of our full-year forecast. Overall, STB’s results were in line with our expectations.

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