Bank on Vietnamese banks with sustainable growth: broker

Investors can bet on Vietnamese banks that have been allocated higher credit quotas compared to the industry’s average, exhibit sustainable growth, maintain robust capital buffers and possess high asset quality, recommends Agriseco Securities.

Conversely, banks that do not meet these criteria may face less positive outlooks, according to the broker.

Plans to increase capital by the end of the year could support the prices of such banking tickers, but banks that do not meet these criteria carry less positive outlooks, it says.

Furthermore, the expected stock market status upgrade from “frontier” to “emerging” in 2025 by global index provider FTSE Russell is hoped to help blue chips, including banking stocks, draw increasing capital flows.

Since the beginning of August, banking stocks have mirrored the overall market trend with varying degrees of recovery.

For example, LPB of LPBank has surged more than 9%, STB of Sacombank 7.6%, ACB of Asia Commercial Bank 4.4%, and VPB of VPBank and VCB of Vietcombank over 3%. On average, this group has achieved a return of over 14%, outperforming the 10% gain of the benchmark VN-Index, which represents the Ho Chi Minh Stock Exchange (HoSE).

However, only 12 of 27 tickers have outperformed the VN-Index, especially LPB of LPBank and TCB of Techcombank. The State Bank of Vietnam (SBV) announced Wednesday that the credit growth across the banking system had reached 6.63% as of August 26, compared to end-2023, significantly below the annual target of 15%.

Lending has been uneven at banks, even negative with some lenders while several others have their credit growth approaching the SBV’s allocation. The central bank has allowed credit institutions with robust lending activities to expand their credit growth limits, as part of a plan to stimulate overall lending.

Specifically, from August 28, banks that have fulfilled 80% of the credit quotas assigned at the start of this year can exceed the limits, depending on their respective ratings.

The quota expansion being granted now is in compliance with Prime Minister Pham Minh Chinh’s request for flexible, effective and timely credit management, aiming to meet credit demand while controlling inflation.

According to their H1/2024 consolidated financial statements, 16 commercial banks had faster credit growth than the industry average. Five of these – HDBank, ACB, Techcombank, LPBank and NCB – saw their outstanding loans rise over 12% in January-June.