bank sector update

8/2/2019 Bank Sector Update

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www.vcsc.com.vn | VCSC Viet Capital Securities | 1

26 January 2011

Vietnam banking sector INDUSTRY UPDATE

Has the storm passed?

In 2010, the banking sector lost 18% as a consequence of new issuances,

dilution issues and new regulatory changes while the VNIndex was down

2%. With new regulations becoming effective, large commercial banks with

adequate capital and hence lower cost of capital, better asset-liability

management and lower operating cost will see higher growth opportunities

and profitability than peers.

- Small capital base, high loan-to-deposit (LDR) ratios and possibility ofhigher non-performing loans (NPL) in the banking system are key

investment risks. In 2011, ten small banks still need to raise at least

VND12,000 billion (~USD600 million) to meet the minimum capital requirement

of VND3,000 billion at year end. High LDR rate with large reliance on borrowings

from other credit institution coupled with high credit growth compared to deposit

growth lead to imbalances in the source of funds. Besides, loans to big state-

owned enterprises such as Vinashin may create higher NPL in the banking

system, which can deteriorate the bottom line.

- New regulations are good catalysts for fundamental improvement in the

banking system in long run. Decree 141 on minimum chartered capital of

VND3,000 billion and Circular 13 relating to sources of capital mobilisation,

capital adequacy ratio, risk-weighted ratio for securities and property loans willlead to many changes in commercial banks operation as they should manage to

raise their capital base and restructure their assets. Given the growing recovery

pace of the economy, improved personal income and increasing number of small

and medium enterprises (SMEs), commercial banks have great potential for

retail banking services and financial services for SMEs.

- We believe it is now a good time to accumulate banking stocks, especially

the top-tier commercial banks with good market share and strong capital

base. Valuations of banking stocks have become increasingly attractive,

currently trading at an average 2010PE of 9.9x and average 1.8x PB, lower than

the general market valuations. Compared to regional peers, the Vietnamese

banking sector posted high ROE of 18% and ROA of 1.5% cf. 15.8% and 1.3%ROA.

We like ACB, STB and EIB as (i) these are the pioneer banks in retail banking

services in Vietnam with good brand name (ii) restructuring period will be good

opportunities for large banks with strong capital base to obtain distressed assets

and gain higher market share in the future (iii) attractive valuation ratios and

ability to improve the bottom line. We also see positive catalysts for capital gain

in the share prices of VCB and CTG as they are the top two largest banks in

Vietnam with sizeable available foreign room.

BANKING

Key indicators

No. of listed banks 8

Total market cap (VND bn) 157,877

Market cap (USD mn) 7,518

%/ total market cap 21.1

Average P/E 2010F (x) 9.9

Average P/B 2010F (x) 1.8

ROA (%) 1.5

ROE (%) 18.0

Key banks ACB EIB VCB

Outstanding shares (mn) 938 1,056 1,759

Foreign room (%) 30% 30% 2.9%

EPS (VND) 2,520 1,642 2,303

EPS growth (%) -20% 28% -29%

P/E (x) 9.6 9.2 14.9

P/B (x) 1.9 1.1 3.2

ROE (%) 22% 13% 23%

ROA (%) 1.2% 1.8% 1.3%

Price performance 3M 6M 12M

Absolute % 13% 3% -10%

Relative % 3% 3% -11%

-30%

-20%

-10%

0%

10%

20%

Jan-1

0

Feb-1

0

Mar-10

Apr-10

May-1

0

Jun-1

0

Jul-10

Aug-1

0

Sep-1

0

Oct-10

Nov-1

0

Dec-1

0

VNINDEX .VNBANK

Hoa Hoang, [email protected]

T: +84 8 39153588 ext 146

See important disclosure at the end


2/17


26 January 2011 Vietnam banking sector update

Why the banking sector?

Maintained good profit growth even during the financial crisis

The past two years were challenging time for the global banking sector. However, Vietnam banks have

managed to avoid the direct impact of the global financial crisis registering average profit growth of

26% in 2008 and 47% in 2009.

Figure 1: Profit after tax growth (% YoY)

Source: VCSC summary

During the first 3Q2010, though faced with a number of regulatory changes, the average net income

growth of the larger banks remained above 23%.

Low cost-to-income ratios

Vietnams average cost-to-income ratio is around 40%, substantially lower than the regional peers,

and above only China and Singapore. With low cost-to-income ratios, Vietnamese banks have been

able to improve their bottom line and increase their profitability ratios.

Figure 2: Vietnams banks maintain a good cost to income ratio

Cost to incomeVietnam banks costs are quite low compared to

regional peers

Source: VCSC summary, The Asian Banker

5%

57% 54%45%

-32%

26%

57%59%

0%

75%

47%

7%

42%38%

-3%

30%23%

-40%

-20%

0%

20%

40%

60%

80%

100%

VCB CTG EIB ACB STB Average

2008 2009 3Q2010

0%

10%

20%

30%

40%

50%

60%

70%

2008 2009 3Q2010

0%

20%

40%

60%

80%

100%


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Effective ratios

Low capital base and good cost management enable Vietnamese banks to earn higher profit ratios.

Except for EIB which increased its charter capital rapidly in 2007, other banks all have double-digit

ROEs.

Figure 3: and high efficiency thanks to low capital base

ROE ROA


Capability to improve efficiency ratios thanks to potential development of retail banking

services and financial services for SMEs

In 2010, Vietnams GDP broke through the USD100billion mark with GDP per capita at nearly

USD1,200 doubling over the last 5 years. The countrys young population combined with improved

personal income will lead to higher demand for retail banking services. Vietnams demographic should

underpin growth in payment services, credit cards and personal financing services.

Figure 4: Vietnam posted a high GDP growth over the past 10 years...

GDP per capita is double within 5 years Vietnam GDP was over USD100bn in 2010

Source: CEIC, GSO

In addition, the private sector played a key role in the Vietnam economic development during the past

10 years with a CAGR of 24%. In 2008, the private sector investment accounted for c. 41% of the total

investment, significantly higher than the state contribution of 29%. Though the government stimulus

0%

5%

10%

15%

20%

25%

30%

VCB

CTG

EIB

ACB

STB

Average

2008 ROE 2009 ROE

0.0%

1.0%

2.0%

3.0%

VCB

CTG

EIB

ACB

STB

Average

2008 ROA 2009 ROA

-

200

400

600

800

1,000

1,200

1,400USD

0

1

2

3

4

5

6

78

9

0

20

40

60

80

100

120

Nominal GDP (RHS)

GDP growth (LHS)USD bn % yoy


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www.vcsc.com.vn | VCSC

26 January 2011 Vietna

following the globincreasing numb

lending, trade fina

Figure 5: ... and rap

Total i

Source: VCSC sum

Attractive valuati

As a consequenc

while the sector

VNIndex was do

gaining 17% durin

Figure 6: Banking

Source: Bloomberg,

59 60 57

23 23 25

18 18 17

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

State

-30%

-20%

-10%

0%

10%

20%

banking sector updat

l financial crisis did increase state sector stimulus inr of small and medium enterprises (SMEs) will dri

ncing and international payment services.

id growth of the private sector

vestment by sectorPrivate sector poste

ary

ons

e of new issuances and dilution issues, investors shi

reatly underperformed the market. In 2010, the ban

n 2%. However, the sector has seen signs of re

g that month.

ector was underperformed in 2010 and only recovered i

VCSC summary

53 48 47 46 4329 35

38

31 38 38 38 41

4139 36

16 14 15 16 1630 26 26

r ivate Foreign Invested

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

2000

2001

2002

VND bn

an-

Feb-1

0

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r-10

Ap

r-10

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0

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l-10

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0

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0

Oc

t-10

VNINDEX .VNBANK

Viet Capital Securities | 4

009 and 2010, we believe theve the demand for corporate

a CAGR of 24% over the past10 years

ied away from banking stocks

ing sector lost 18% while the

overy since December 2010

the last month of 2010

2003

2004

2005

2006

2007

2008

2009

2010

Nov-1

0

Dec-1

0

Jan-1

1


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Valuations of banking stocks have become increasingly attractive, currently trading at an average 8.9xPER and average 1.6x PB, lower than the market valuations and regional peers. For large commercial

banks such as ACB, STB and EIB, these banks have been trading at a large discount compared to

their peers in domestic markets as these are highly liquid stocks and no available room for foreign

investors (currently at 30% of charter capital).

Figure 7: Banking sector was also underperformed in 2010 in terms of PE and PB

PE PB

Source: Bloomberg, VCSC summary

Compared to regional peers, the Vietnamese banking sector posted higher ROE of 18% and ROA of

1.5% cf. 15.7% ROE and 1.3% ROA.Figure 8: Vietnams banks are quite small compared to regional peers but have better efficiency ratios

CountryMarket cap(USD mn)

Total Assets(USD mn)

P/E

(x)

P/B

(x)

ROE LF

(%)

ROA LF

(%)

China (5 securities) 7,572 83,981 10.62 1.91 19.71 1.05

Thailand (10 securities) 4,765 31,726 18.00 1.79 13.44 1.24

Malaysia (10 securities) 4,164 26,634 12.43 1.81 16.08 1.16

Indonesia (18 securities) 4,256 12,351 22.06 2.87 17.80 1.78

India (36 securities) 2,062 23,012 12.39 1.59 16.17 0.91

Philippines (12 securities) 1,358 7,603 12.35 1.60 13.45 1.73

Vietnam (8 securities) 1,145 7,775 8.89 1.61 18.01 1.56

Pakistan (14 securities) 587 4,546 11.56 1.29 13.12 1.11

Sri Lanka (6 securities) 453 1,590 23.21 2.88 14.13 1.45

Average 2,929 22,135 14.61 1.93 15.77 1.33

Source: Bloomberg, 26 January 2011

We believe it is now a good time to accumulate banking stocks, especially the large bank with good

market share and strong capital base. We like ACB, STB and EIB as (i) these are the pioneer banks in

retail banking services in Vietnam with good brand name (ii) restructuring period will be goodopportunities for large banks with strong capital base to obtain distressed assets and gain higher

market share in the future (iii) attractive valuation ratios and ability to improve the bottom line. We also

-

2.0

4.0

6.0

8.010.0

12.0

14.0

01-1

0

02-1

0

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0

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PE -VNindex

PE - ACB

PE - STB

0.0

0.5

1.0

1.5

2.0

2.5

3.0

04-1

0

05-1

0

05-1

0

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PB- VNIndex

PB-EIB

PB-STB


6/17



see good catalyst for capital gain in the share prices of VCB and CTG as they are the two largestbanks in Vietnam with sizeable available foreign room.

Figure 10: Comparison between listed banks

Unit: VND bn VCB CTG ACB STB EIB SHB

Current Outstanding Shares (mn) 1,759 1,517 938 918 1,056 349

Share Price as 26/1/2011 (VND000) 34.3 23.5 24.4 15.8 15.2 11.2

Charter Capital 2010 17,588 15,172 9,377 9,179 10,560 3,493

Increase in 2010 charter cap 45% 35% 20% 37% 20% 75%

Current Market Capitalization 60,325 35,655 22,879 14,503 16,051 3,912

Current Free float (%) 9.3% 10.8% 100% 100% 100% 100%

Current Foreign ownership (%) 2.9% 1.0% 30% 30% 30% 1.5%

EPS 2010F 2,303 2,224 2,520 1,990 1,642 1,402

EPS growth -29% -3% -11% -20% 28% -10%

ROE 2010F 23% 23% 22% 16% 13% 18%

ROA 2010F 1.3% 0.9% 1.2% 1.3% 1.8% 1.2%

PB 2010F 3.2 2.2 2.0 1.1 1.1 1.3

PE 2010F 14.9 10.6 9.7 7.9 9.3 8.0

Source: VCSC summary, 26 Jan 2011

Structural changes improve long-term fundamentals of

the sector

The State Bank of Vietnam implemented a number of new rules in 2010 that will affect the operations

of commercial banks going forward.

Figure 9: New banking regulations applicable to commercial banks in 2010

No. Legal document Content Effective date

1 Decree No. 141/2006/ND-CP

dated 22 November 2006

Minimum chartered capital of VND3,000bn

(~USD150mn) by end of 2010

2 Circular No. 15/2009/TT-NHNN

dated 10 August 2009

Requires commercial banks to use up to

30%, instead of 40%, of the short-term

deposit for medium and long-term loans

1 Jan 2010

3 Letter No. 369/TB-VPCP dated

30 December 2009

Bans banks from trading gold 31 Mar 2010


dated 26 February 2010 andCircular 12/2010/TT-NHNN

dated 14 April 2010

Allows commercial banks to negotiate

lending rates on short-term and long-termloans

14 Apr 2010


7/17



No. Legal document Content Effective date


dated 20 May 2010

Stipulates prudential ratios in operations

for credit institutions

1 Oct 2010


dated 27 September 2010

Adjusts some articles in Circular 13,

especially the components of total

deposits

1 Oct 2010


dated 29 October 2010

Restricts gold lending to specific gold-

related entities

29 Oct 2010

8 Law No. 47/2010/QH12 on

credit institutions

Regulates the operations of credit

institutions

1 Jan 2011


Circular 13 and the 2010 Law on Credit Institutions will bring about fundamental improvements as

commercial banks will have to make appropriate changes in their operations and development

strategies.

Effects of Decree 141

Decree No. 141/2006/ND-CP, issued on 22 November 2006, required all commercial banks to have a

minimum chartered capital of VND3,000bn (c. USD150mn) by the end of 2010.

At the beginning of 2010, there were 22 commercial banks with a chartered capital below the

VND3,000bn threshold and the sector, as whole, would need at least VND33,000bn to meet the

minimum capital requirement. Concurrently, the larger commercial banks had plans to increase their

capital base to meet the new CAR requirements. As a result, fear of oversupply of bank stocks led to a

sluggish performance in the sector for the whole of 2010.

Until December 2010, there were 10 small commercial banks that were unable to raise the charter

capital to VND3,000 billion. During 2010, these banks can only attract VND3,507 billion, approximately

one fourth of total capital demand. As such, these banks will need to raise at least VND12,000 billion

(~USD600 million) in 2011 to meet the minimum capital requirement of VND3,000 billion at the end of

2011.

However, on 14 December 2010, the SBV extended the deadline until the end of 2011. The deferment

has lessened the immediate capital need allowing the sector to recover to attractive levels, laying the

foundation for a successful capital raise in 2011.

Figure 11: Banks with charter capital of less than VND3,000 billion at the end of 2010

Bank name

Charter capital

@ 31/12/2009

Charter capital

@ 31/12/2010

Increase during

2010

Unable to raise

capital in 2010

1 OCB 2,000 2,635 635 465

2 Western Bank 2,000 2,000 - 1,000

3 Nam A 2,000 2,000 - 1,000

4 Viet A 1,515 2,087 572 913

5 Kien Long 1,000 2,000 1,000 1,000

6 Gia Dinh 1,000 2,000 1,000 1,000


8/17



Bank name

Charter capital

@ 31/12/2009

Charter capital

@ 31/12/2010

Increase during

2010

Unable to raise

capital in 2010

7 SG Cong thuong 1,500 1,800 300 1,200

8 Bao Viet 1,500 1,500 - 1,500

9 VN Thuong tin 1,000 1,000 - 2,000

10 Petrolimex 1,000 1,000 - 2,000

Total 14,515 18,022 3,507 12,078

Source: Banks website, SBV, VCSC summary

Impact of Circular 13

Circular 13 implements a set of important obligations for the banking sector:

- The CAR is raised from 8% to 9%.

- The loans-to-total-deposits ratio is not allowed to exceed 80%.

- The risk weight ratio for securities and property loans is 250% (previously 100%).

- Investments in other credit institutions and subsidiaries in the form of capital contribution or

purchase of shares are excluded from Tier 1 capital.

- Total investment in subsidiaries and affiliates must not exceed 25% of the credit institutions

charter capital and reserve funds.

- Total capital contribution and financial investments in all enterprises, investment funds,

investment projects or other credit institutions and in affiliated companies must not exceed

40% of credit institutions charter capital and reserve funds.

- Credit institutions are banned from lending to affiliated securities trading businesses or from

providing unsecured loans for securities investment and trading. Total outstanding loans for

securities investments and trading must not exceed 20% of the banks charter capital.

With these requirements, many of the commercial banks will have to restructure their assets and

operations, which may lead to higher cost of fund and lower net interest margin.

Enhancing financial capability

Currently, among the 40 commercial banks, only ten have a charter capital of over VND5,000 billion,

of which only VCB, CTG and EIB have a charter capital above VND10,000 billion (excluding the two

largest state-owned commercial banks BIDV and Agribank).

The average chartered capital of the Vietnam banking system is VND3,666 billion (~USD183 million),

much lower than those of regional peers. As the average capital base of the banking system is still

low, the capital raising story of the banking system not only created a great pressure on the local

market in 2010 but may last through 2-3 years afterwards.

For 10 small banks with chartered capital below VND3,000 billion, they will need to fulfil their capital

raising plan in 2011. Also, such large bank as CTG also has plan to increase its chartered capital from

VND15,172 billion to c. VND30,000 billion in 2011.


9/17



Expanding sources of capital mobilisation

Prior to Circular 22, banks were allowed to convert gold deposits into Vietnam Dong equivalent for

lending. However, as this regulation was removed, banks have to attract more VND deposits, mainly

short-term deposits to ensure the balance between deposits and loans.

We should continue to see banks divesting their positions in other credit institutions and non-core

businesses to enhance their owners equity because these are excluded from Tier 1s capital. VCB

recently sold a portion of its ownership in EIB and PVD.

Issuing long-term bonds

As banks are allowed to include bonds of over 5-year term into their Tier 2 capital, many banks plan to

issue longer-term bonds with or without conversion terms. This should allow banks to enhance their

asset-liability management, reducing their liquidity risk. Both ACB and Techcombank issuedVND3,000bn 10-year bonds to enhance their capital base.

Reducing loans to securities and real estate sectors and increasing focus on consumer

lending

Banks normally charge higher interest rates for securities and real estate lending. However, these

loans now have a higher risk weight ratio of 250%, which will impact the cost of funding and lower the

interest income.

Expanding sources of capital mobilisation will raise banks cost of capital. Meanwhile, reducing loans

to fields that can afford high lending interest rate such as securities, real estate loans lessen banks

interest income. Consequently, we believe banks will increase their focus on consumer loans, which

can charge higher interest rates and are subject to a lower risk weight ratio.

The 2010 law on credit institutions

The law on credit institutions stipulates that commercial banks must establish or acquire subsidiaries/

associates to carry out the following business operations: underwriting, securities brokerage, financial

leasing and insurance. Meanwhile, under Circular 13, investments in other credit institutions and

affiliated companies in the form of capital contribution or purchase of shares are excluded from Tier 1

capital.

Under the new law, only commercial banks are allowed to provide such banking services as capital

mobilisation, lending and settlement services for organizations and individuals. Non-banking

institutions, such as financial leasing companies, are prohibited from receiving deposits fromindividuals and provide payment services via clients bank accounts. Accordingly, finance companies

such as PVF will face difficulties in expanding their operations as they can only serve organizations

and not extend to retail clients. We believe the retail segment will become increasingly important for

commercial banks. Credit institutions are banned from lending:

- to securities brokers that the credit institutions hold control.

- if secured assets are stocks of the credit institution or its subsidiaries.

- to make capital contributions to another credit institution if secured assets are stocks of the

credit institution receiving the contributed capital.

In addition, under the new banking law, banks must comply with the following requirements:

- Total outstanding loans to a subsidiary/associate that the credit institution holds control are

not allowed to exceed 10% of the credit institutions equity and 20% of the credit institutions

equity is the limit for total outstanding loans to allsubsidiaries and associates.


10/17



- Total outstanding loans to a client are not allowed to exceed 15% of the credit institutionsequity and total outstanding loans to a client and related person should not exceed 25% of

the credit institutions equity.

Key investment risks

Many banks in Vietnam have a small capital base compared to total assets

At the end of 2009, according to The Asian Banker, average total assets of the top 10 largest banks in

Vietnam was USD8,363 million or USD6,694 million if the state-owned bank - Agribank is excluded.

The small size of Vietnam banks puts individual banks under pressure to increase their capital base

and ensure comfortable capital adequacy ratios. As the CAR is not available and vary from countries

to countries, we use equity/asset ratio to compare between banks in Vietnam and in the region.

Figure 12: Top 10 largest banks in Vietnam in term of assets and its regional peers

Unit: USD mn Assets Net profit Equity ROE (%) Equity/Asset (%)

Agribank 23,384 196 751 26.1 3.2

Vietcombank (*) 15,050 232 903 25.7 6.0

Vietinbank (*) 13,193 140 711 19.7 5.4

ACB (*) 9,085 119 502 23.7 5.5

STB (*) 5,629 90 517 17.4 9.2Military Bank 3,734 64 342 18.7 9.2

EIB (*) 3,542 61 735 8.3 20.7

TCB 3,495 69 280 24.6 8.0

Maritime bank 3,457 42 152 27.6 4.4

VIB 3,065 25 147 17.0 4.8

Average top 10 banks in:

Vietnam 8,363 104 504 20.9 7.6

Philippines 9,039 84 902 10.8 10.0

Indonesia 17,878 312 1,580 17.2 8.6

Thailand 25,936 265 2,389 9.9 9.4

Malaysia 35,923 338 2,850 14.1 7.5

India 83,289 726 5,058 17.0 5.9

China 749,372 6,925 35,122 20.4 4.6

Source: The Asian Banker (*) listed banks in Vietnam

Even large banks such as VCB or CTG had an equity-to-total-asset ratio of less than 8% in 3Q2010.

As such, the minimum CAR of 9% as required by Circular 13 from 1 October 2010, may be difficult to

attain for many of the banks in the country.


11/17



Figure 13: 3Q2010 Equity/Total asset (%)


High LDR ratios

At the end of the third quarter of 2010, four of the five banks in our coverage list had loans-to-deposits

ratios of over 80%. Circular 19 expands the total deposit base when calculating LDR ratios, leaving

some buffer for the banking system. Sources of capital that banks can use for lending include:

Non-term and term deposits from individuals.

Term deposits from organizations including those from other credit institutions.

25% of non-term deposits from economic institutions (excluding those from credit

institutions). This means the larger banks will benefit from the large balance of non-term

deposits of Vietnams State Treasury of c. VND52,000 billion, in which c. VND20,000 billion

are at the four largest banks Agribank, BIDV, VCB and CTG.

Loans from domestic organizations and other credit institutions with terms of three months or

more.

Capital mobilized through issuing valuable papers.

Figure 14: High loan to deposit ratio with large reliance on borrowings from other credit institutions

LDRBorrowings from other credit institutions/Total

deposits


0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

VCB CTG EIB ACB STB

CAR=9%

0%

50%

100%

150%

VCB CTG EIB ACB STB

2008 2009 3Q2010

0%

10%

20%

30%

VCB CTG EIB ACB STB

2008 2009 3Q2010


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Higher liquidity risks

Credit growth in Vietnam has historically been much higher than customer deposits growth, extending

the spread between short-term deposits for longer-term loans. For the whole banking system, since

2007 credit growth has remained above deposit growth.

Figure 15: Credit growth is always much higher than deposit growth

The whole banking system 2009 deposit and credit growth of selected banks

Source: SBV, VCSC summary

Possibility of higher NPL ratios

Although, average NPL remained at c. 2.5% in 2010, actual NPL in the banking system may be higher

as some banks may not make full provisions for big state-owned enterprises (SOEs) loans. Vinashin is

now in restructuring total outstanding loans of VND86,000 billion, of which c. VND26,000bn is in the

banking system. These loans have not been included in the current NPL of the banking system.

According to SBVs estimate, NPL could rise to 3.2% if they take into account Vinashins debt.

32%

37%48%

23% 27%

42%

25%

54%

25%

40%

29%

0%

10%

20%

30%

40%

50%

60%

2004 2005 2006 2007 2008 2009 2010

Deposit growth Credit growth

0%

20%

40%

60%

80%

100%

VCB CTG EIB ACB STB

Deposit growth Credit growth


13/17



Appendix 1: Comparison of listed banks

COMPARABLE (VND bn) VCB CTG ACB STB EIB SHB

Current Outstanding Shares (mn) 1,759 1,517 938 918 1,056 349

Share Price 26/01/2011 (VND000) 34.3 23.5 24.4 15.8 15.2 11.2

Charter Capital 2009 12,100 11,252 7,814 6,700 8,800 2,000

Charter Capital 2010 17,588 15,172 9,377 9,179 10,560 3,493

Increase in 2010 charter cap 45% 35% 20% 37% 20% 75%

Current Market Capitalization 60,325 35,655 22,879 14,503 16,051 3,912

Current Free float (%) 9.3% 10.8% 100% 100% 100% 100%

Current Foreign ownership (%) 2.9% 1.0% 30% 30% 30% 1.5%

Profit before tax

2009 A 5,004 3,373 2,838 2,175 1,533 415

2010 F 5,400 4,500 3,150 2,436 2,312 653

2010 earnings growth F 8% 33% 11% 12% 51% 57%

Profit after tax (PAT)

2009 A 3,945 2,573 2,201 1,671 1,132 311

2010 F 4,050 3,375 2,363 1,827 1,734 490

Total loans (before provision)

2009 A 141,621 163,170 62,358 59,657 38,381 12,829

2010 F 171,361 233,333 96,000 80,000 60,642 16,677

Total Deposit (*)

2009 A 207,542 177,034 108,992 85,632 41,294 24,615

2010 F 259,428 256,699 163,488 119,885 67,000 32,000Total assets

2009 A 256,053 243,785 167,881 104,019 65,488 27,439

2010 F 307,264 368,115 201,457 137,305 94,958 40,000

Credit growth (%)

2009 A 27% 35% 81% 70% 81% 49%

2010 F 21% 43% 54% 34% 58% 30%

Deposit growth (%)

2009 A 32% 27% 35% 37% 26% 34%

2010 F 25% 45% 50% 40% 43% 30%

Asset growth (%)

2009 A15% 24% 63% 44% 37% 90%

2010 F 20% 51% 20% 32% 45% 46%

Loan/Deposit rate (%)

2009 A 68% 92% 57% 70% 93% 52%

2010 F 66% 91% 59% 67% 91% 52%

Equity/Total asset (%)

2009 A 7% 5% 6% 10% 20% 9%

2010 F 6% 5% 6% 9% 15% 7%

EPS 2010F 2,303 2,224 2,520 1,990 1,642 1,402

EPS growth -29% -3% -11% -20% 28% -10%

ROA 2010F 1.3% 0.9% 1.2% 1.3% 1.8% 1.2%

ROE 2010F 23% 23% 22% 16% 13% 18%

PB 2010F 3.2 2.2 2.0 1.1 1.1 1.3

PE 2010F 14.9 10.6 9.7 7.9 9.3 8.0

* Total deposit includes customer deposit and other credit institutions deposit.


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Appendix 2: Charter capital increase of commercial banks in Vietnam

Charter capital (VND bn)Not yet issued in

2010Bank name 12/31/2009 12/31/2010 Increase

1 VCB HOSE 13,224 17,588 4,364

2 CTG HOSE 11,253 15,172 3,919

3 EIB HOSE 8,800 10,560 1,760

4 ACB HNX 7,814 9,377 1,563

5 STB HOSE 6,700 9,179 2,479

6 SHB HNX 2,000 3,498 1,498

7 NVB HNX 1,000 3,304 2,304

8 HBB HNX 3,000 3,000 - 1,050

Total listed banks 20,514 28,357 7,843

9 TCB OTC 5,400 6,932 1,532

10 MB OTC 5,300 6,700 1,400

11 Dong Nam A OTC 5,068 5,334 266

12 Maritime Bank OTC 3,000 5,000 2,000

13 Dong A OTC 3,400 4,500 1,100

14 SCB OTC 3,653 4,185 532

15 VIB OTC 3,000 4,000 1,000

16 ABB OTC 3,482 3,830 348

17 Lien Viet OTC 3,650 3,650 - 1,510

18 Tin Nghia OTC 3,399 3,399 -

19 VP Bank OTC 2,117 4,000 1,883

20 Southern Bank OTC 2,568 3,049 481

21 Ocean Bank OTC 2,000 3,500 1,500 1,500

22 Dai tin OTC 2,000 3,000 1,000

23 Tien Phong OTC 2,000 3,000 1,000

24 Bac A OTC 2,120 3,000 880

25 GP Bank OTC 2,000 3,018 1,018

26 HDB OTC 1,550 3,000 1,450

27 Mekong housing OTC 1,000 3,000 2,000

28 Dai A OTC 1,000 3,100 2,100

29 De Nhat OTC 1,000 3,000 2,000

30 Gia Dinh OTC 1,000 2,000 1,000

31 OCB OTC 2,000 2,635 635 465

32 Western Bank OTC 2,000 2,000 - 1,000

33 Viet A OTC 1,515 2,087 572 913

34 Kien Long OTC 1,000 2,000 1,000

35 Nam A OTC 2,000 2,000 - 1,000

36 Saigon Cong thuong OTC 1,500 1,800 300 1,200


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37 Bao Viet OTC 1,500 1,500 - 1,500

38 VN thuong tin OTC 1,000 1,000 - 2,000

39 Petrolimex OTC 1,000 1,000 - 2,000

Total OTC banks 73,222 100,219 26,997

Total Banks 93,737 128,576 34,840


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Analyst CertificationI, Hoa Hoang, hereby certify that the views expressed in this report accurately reflect my personal views about the

subject securities or issuers. I also certify that no part of my compensation was, is, or will be, directly or indirectly,

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