Company Insight

- ACB's credit growth in 9M/2024 was very positive, reaching 12.8% YTD. Of which, the retail customer segment increased by 12% YTD (the home loan product increased positively by 14% ytd), the corporate customer group achieved an increase of more than 15% YTD (commerce and manufacturing industry). With a low deposit interest rate base, ACB's mobilization growth reached about 6.2% YTD (higher than the industry average of 4.8% YTD). The high level of competition in lending interest rates among banks caused ACB's NIM to narrow compared to the beginning of the year from 4.0% at the end of 2023 to 3.8% at the end of Q3/2024. Net interest income in 9M/2024 increased by 11% (YoY), reaching VND 20,714 billion.

- Non-interest income in 9M/2024 decreased sharply by -26% YoY. Fee income still showed positive growth of 8%, with the main contribution from the card and payment services segment. Meanwhile, unfavourable interest rate developments not allowing ACB to record trading profits from the government bond portfolio, this segment has decreased sharply. In addition, the real estate market has not recovered as expected, causing other income from the disposal of non-performing assets to grow negatively in 9M/2024. In 9M/2024, ACB was able to control operating expenses relatively in line with the bank's income growth, with CIR in 9M/2024 at 33% (compared to 32% in 9M/2023).

- In terms of asset quality, ACB's NPL ratio has stabilized right below 1.5%. The restructured NPL according to Circular 02 is currently only at 0.2%. The reduction in the bad debt formation rate is the basis for ACB to expect the NPL ratio end of 2024 below 1.5%. ACB's pre-tax profit for 9M/2024 reached VND 15,335 billion (+2.1% YoY), completing 70% of the whole year plan.

- ACB has been granted a credit limit of 18.4% by SBV, and we forecast that ACB can fully utilize this limit in 2024 and could grow by 16% in 2025. NPL ratio is controlled at around 1.5%. NIM is under pressure to narrow and decrease slightly to be around 3.7-3.8% for 2024-2025 period. Non-interest income in 2024 would decrease by 9.2% YoY, before recovering by more than 30% in 2025. With a cautious lending appetite, we maintain ACB's credit cost at around 0.5% for 2024-2025. ACB's pre-tax profit for 2024 and 2025 could reach VND21,145 billion (+5% YoY) and VND25,855 billion (+22.3% YoY).