3 bank stocks rebound after scandal, draw ‘concern’ from SSI Research

SSI (HM:) Research predicts that the growth rate of banking group pre-tax profits in 2024 will be more than three times the growth rate in 2023. The brokerage named 3 stocks worth investing in this year. In its 2024 Banking Industry Outlook report, SSI Research assessed that this year will be a challenging year for the industry group in terms of asset quality. However, the overall picture will improve from 2023, largely driven by capital costs falling to much lower levels than in 2023 and improvements in pre-provision profit (PPOP) to help bank goods have room to create Better backup buffering.

SSI Research expects 2024 profit before tax (PBT) growth for banks under its coverage to reach 15.4% of total assets, which is better than the 4.6% growth rate in 2020. 2023.

SSI Research has given a list of stocks worth investing in this year and recommended 3 stocks including BID, ACB (HM:), and STB.

Asian Commercial Bank (HoSE:ACB)

ACB is a bank with a strong financial foundation. In the face of economic difficulties, ACB still manages asset quality well, with the lowest bad debt rate in the industry, while maintaining a 17% growth in pre-tax profits in 2023. Looking forward to 2024, the bank is expected to control the bad debt ratio at 1.2% and the provision buffer as high as 82.2%.

SSI Research predicts that although credit costs are likely to remain at a relatively high level of 0.42%, the bank’s pre-tax profit will grow by 14% in 2024 to RMB 228,000, thanks to credit growth and a recovery in net interest margins. billion VND.

ACB’s price-to-book ratio in 2023 is 1.04x and its return on equity in 2024 is 22.8, which is quite attractive. The stock’s 1-year target price is VND27,500 per share.

>> ACB: Banks bucked the trend, the stock market peaked, and deposit rates were raised again

Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV (HM:) – HoSE: BID)

Currently, BIDV is the leading bank in the system in terms of total credit, with a retail/commercial loan ratio of 44%/56% at the end of the third quarter of 2023. The bank is also actively issuing higher-quality home loans in the fourth quarter of 2023 through its preferential loan program. This can help BID attract many high-quality individual customers and help NIM make progress in the medium term.

BID’s pre-tax profit is expected to grow strongly from 2023 to 2024, reaching 19.2% and 14.2% respectively. Key growth drivers include credit growth, stable net interest margin and controlled provisions.

BID plans to issue 9% of registered capital before implementation to support medium-term growth. If successful, CAR is expected to improve by approximately 130-150 basis points.

SSI Research expects bids this year to reach VND50,500 per share.

>> BIDV (BID): The banking sector’s ‘white whale’ is struggling to find the top

Sacombank – HoSE: HM:

Sacombank’s credit growth is higher as its restructuring plan nears its final stages. SSI Research expects STB to complete VAMC provisions in 2024, helping the bank achieve higher credit growth in 2024 amid a gradual macroeconomic recovery.

Sacombank expects EBT growth to be 27.1% in 2024 due to a recovery in net interest margin and the reversal of provisions for the sale of Phong Phu Industrial Park. In a more positive scenario, the STB will obtain approval from the National Bank to resolve the VAMC share freeze.

SSI Research predicts that STB stock price may reach VND33,700 this year.

>> 3 bank stocks worth investing in 2024, with potential stock price increases of up to 37%