VPB – Loan growth slowdown dents earnings – Update

• 1H18 pretax profit reached VND4,375bn, fulfilling only 40.5% of the bank’s FY18 target, and also below our expectations at 41.3% of our full-year forecast.
• The sluggish performance at FE Credit was due to loan growth slowdown as the bank restructured its unsecured lending business following the central bank’s inspection.
• The high profit growth of the parent bank compensated for lower growth of FE Credit.
• We revise down our TP to VND32,500 to account for lower loan growth for FY18-20F.
• Current valuation is attractive but asset quality deterioration is a medium-term risk.

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