- We lower our target price (TP) for VIB by 12.3% to VND16,100/share and maintain our OUTPERFORM rating. Our lower TP is due to (1) reducing our target P/B multiple from 1.2x to 0.9x, reflecting our projection for deteriorating asset quality in 2027F, and (2) an 18.7% decrease in our aggregate 2026-2030F NPAT-MI (-13.6%/-22.5%/-22.1%/-20.5%/-15.4% in 2026/27/28/29/30F) that more than offset the positive impact from rolling forward our forecast period to mid-2027F.
- We lower our forecast for 2026F NPAT-MI by 13.6% mainly due to (1) H1 2026’s weaker-than-expected core earnings with sluggish credit growth and (2) the bank’s shift to the corporate sector which has a lower yield, driving down 2026F NIM by 11 bps YoY.
- VIB is currently trading at a forward 2026F P/B of 0.93x – a 19.8% discount, compared to its peer median of 1.16x with a 2026F ROE of 17.0% vs a peer median ROE of 17.6%, per our forecast. However, VIB’s 2026 earnings are partly supported by one-off income.
- Downside risks: Slower-than-expected credit growth, further NIM compression. Upside potential: Higher-than-expected recovery income.
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