Lienviet Post JS Commercial Bank – Outperform (LPB : UPCoM – Bank)

Lienviet Post JS Commercial Bank – Outperform (LPB : UPCoM – Bank)


  • Lienviet Post Bank (LPB; Outperform) posted 9M consolidated PBT of VND 1,014 billion (-29.3% y/y), despite recording 14.5% YTD growth in customer loans and a 0.6% YTD drop in customer deposits.


  • Its overall NIM shrunk by 99 bps y/y to 3.12%. Thus, NII decreased by 8.1% y/y to VND 3,587 billion.


  • Additionally, total non-NII still showed a mild loss of VND 113 billion. Operating expenses rose by 14.6% y/y to VND 2,107 billion. Provisioning expenses dropped by 25.8% y/y to VND 351 billion.


  • For FY2018F, HSC kept our most updated forecast of VND 1,217 billion (-31.2% y/y).


  • For FY2019F, we forecast of 35.2% y/y growth in PBT to VND 1,645 billion.


  • Although over the longer term LPB looks very interesting, with an aggressive strategy of network expansion, the short- and medium-term outlook is mixed.


  • Reiterate Outperform with fair value of VND 20,000 per share, representing for FY2018 P/B of 1.5x, as the SBV has taken a stricter view on credit growth.




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