TPB – Leveraging digital ecosystem for sustainable growth – Update

• We maintain our ADD rating, with a target price of VND21,700, implying 38.5% upside, reflecting our expectation of improving asset quality alongside steady profit growth.

• The reasons for our target price are a higher FY26-27 earning forecast, and rolling our residual income model to FY2026-30F

Asset quality improves, easing provisioning pressure
TPB’s NPLs fell from a five-year peak of 2.1% in 2023 to 1.3% in 2025, supported by tighter underwriting in retail and SME lending and a strategic shift in consumer finance. The bank enhanced early warning systems and proactively assisted borrowers facing difficulties to prevent defaults, while shifting away from high-risk cash loans toward transaction-backed lending on e-commerce platforms (E.g., Shopee). In the real estate segment, TPB focuses on residential projects in major cities, tightening DTI and LTV limits. These measures are expected to gradually strengthen TPB’s asset quality.

Strong fee income growth boosts earnings
In 2025, TPB’s fee income rose 23% YoY, driven by settlement services and credit card related fees. The bank benefits from its early digitalization, supported by a nationwide 24/7 LiveBank network and an open ecosystem integrated with multiple e-wallets and digital platforms (E.g., Shopee, Momo, Viettel money). These advantages drive customer growth, enhance cross-selling, and support fee income diversification. In addition, the consolidation of Tien Phong Securities (TPS) strengthens the bank’s financial ecosystem and expands income from securities-related services. We expect fee income to maintain strong growth in 2026, supported by the bank’s digitalization advantages and the ongoing enhancement of its financial ecosystem.

Attractive valuation
TPB is currently trading at 1.0x P/B, below its five-year average of 1.2x and close to a -1 standard deviation band, suggesting room for re-rating as asset quality improves and earnings continue to grow strongly. The stock also trades below the industry average of 1.3x, which we believe does not fully reflect its long-term growth potential, particularly as its digital ecosystem continues to support customer expansion and fee income growth.

Read the full report: HERE