Vietnam Banks

In 2024, we forecast that listed banks' pre-tax profit (PBT) will grow by 15% year-on-year (YoY), reaching VND 293,650 billion. The credit growth target for 2024 is set at 15% and has been delegated to individual banks to maximize flexibility. Assuming banks utilize around 90% of their credit room, credit growth in 2024 is projected to reach approximately 14.83%. For loan to deposit ratio (LDR), banks are setting their own targets for 2024, with an average target of around 16%. However, some large banks, such as ACB, LPB, TPB, and VCB, have set LDR growth targets below the government's overall target. Net interest margin (NIM) is expected to recover to 3.75% in 2024, with larger banks likely to achieve higher NIMs. Valuation-wise, both P/E and P/B ratios for the banking sector are still below their historical averages from 2013, indicating that the sector remains attractively priced.