MBB – Reinitiation – 20180705

• MBB’s NIM of 4.4% in 1Q18 was the second highest in the Vietnam bank sector, and we think it could rise further, thanks to retail lending expansion lifting asset yields.
• The new unsecured lending business has great potential to become an earnings growth driver, in our view.
• We project loan CAGR of 18% in FY18-20F and forecast a non-Basel II Tier 1 ratio of 9.8% & Basel II Tier 1 ratio of 7.5% in FY19F.
• We believe MBB can improve its fee income franchise with new strategies for banking digitalisation, bancassurance and cross-selling products through its partner network.
• We forecast net profit CAGR of 16.4% and average ROE of 17.1% over FY18-20F.

Please follow this link for the full report