Company Insight

At the AGM on April 19, 2024, MBB announced its business goals for 2024, including PBT growth rate around 6-8%, credit growth of 15-16%, total asset growth of 13%, and non-performing loan (NPL) ratio below 2%. MBB aims for an average profit growth of 14%/year for the period of 2024- 2029. For the Q1/2024 results, MBB achieved a credit growth of around 0.40% Ytd. Total operating income reached approximately VND 12,017 billion, (+0.73% YoY). However, PBT for Q1/2024 was around VND 5,795 billion(-11.01% YoY). The parent bank's net profit reached VND 5,258 billion (-9.78 YoY). Management acknowledges the conservative 2024 business goals. They reason that credit demand has yet to fully recover, putting pressure on Net Interest Margin (NIM). Additionally, provisioning expenses are expected to rise throughout the year. Regarding the Novaland client, MBB informed that legal issues surrounding Novaland's key projects (Aqua City and NovaWorld Phan Thiet) are being addressed. MBB has already recovered VND 2,400 billion of Novaland's outstanding debt, and currently classifies this debt under group 1. On the dividend payout policy, MBB approved a plan to distribute 5% in cash and 15% in stock. The bank also intends to maintain a dividend policy of around 15-20% for the next five years. MBB's subsidiary, M-credit, faced challenges in the consumer lending market in 2023, resulting in a profit of only around VND 300 billion. M-credit anticipates doubling its profit in 2024 due to the ongoing shift away from cash lending, a practice considered riskier by the company. 

We expect MBB's credit growth in 2024 to be around 15.6%. The average cost of capital is projected to decrease to 3.5% (from 4.37% in 2023). The bank's NIM is likely to remain stable at around 4.86% in 2024. With an LLR target of over 100% and active efforts to write-off NPL, we forecast MBB to significantly increase its risk provisioning expenses in 2024. The NPL ratio for 2024 is projected to be controlled around 2%. MBB's net profit for 2024 is expected to reach VND 28,607 billion (+8.75% YoY).