Techcombank's operational efficiency continues to be among the leading banks.

Specifically, at the end of the third quarter, TCB recorded stable business results, in line with the forecast plan. Total operating income (TOI) improved significantly, reaching VND 10,418 billion, the highest level since Q3/2022. Mr. Jens Lottner - CEO of Techcombank - stated that this trend is quite consistent with the forecast and reflects the bank's sustainable financial health.

NIM recovers strongly.

According to JP Morgan's assessment of Techcombank's Q3 2023 business results, net interest income (NIM) increased 16% quarter-on-quarter, reversing the downward trend of the previous three quarters, thanks to improved asset growth and cost of capital. Non-interest income increased 4% year-on-quarter, driven by income from trading activities (securities and foreign exchange trading) and income from service activities.

Sharing the same assessment, UBS believes that TCB's profit is in line with its forecast, reaching VND 5.8 trillion in the third quarter, but about 17% higher than the market average forecast. According to UBS, the Net Interest Margin (NIM) recovered strongly, increasing by more than 40 basis points in the third quarter compared to the previous quarter. This assessment coincides with Maybank's assessment, regarding Techcombank's year-on-year NIM, which increased to 4.19% in the first nine months of 2023, compared to 4.08% in the first six months, thanks to stable lending interest rates at 8.8%, and a decrease in the cost of capital to approximately 4.96%.

According to analysts at Maybank, TCB's business results have shown positive signs of recovery. Its year-on-year ROE is 15.2%, and in terms of ROA, TCB maintains its industry-leading position at 2.4%. Furthermore, Techcombank's CASA ratio remains strong at 33.6%, thanks to stable CASA balance growth driven by the bank's proactive efforts to attract new customers.

Maybank believes that Techcombank's asset quality remains relatively good, with absolute non-performing loans increasing by 29% quarter-on-quarter and 113% year-on-year to VND 6.5 trillion, corresponding to a non-performing loan ratio of 1.36%. The non-performing loan coverage ratio is at 93%. Meanwhile, Group 2 loans (loans requiring attention) decreased by 35% quarter-on-quarter and 32% year-on-year, accounting for 1.3% of total outstanding loans. The loan-to-value ratio (CIR) remained at 33.2%, despite the bank's continued investment in fixed assets (such as new office buildings) and technology, the organization noted. "Techcombank's asset quality indicators appear to be much better than those of other commercial banks and the market's previous concerns," Maybank stated.

TCB stock is a top choice in the banking sector.

Given Techcombank's positive business results, JP Morgan maintains its Overweight recommendation with a target price of VND 40,000 per share, 33% higher than the current share price (closing price on October 31st at VND 27,700 per share).

According to Maybank, TCB is trading at a P/B ratio of 0.85x and they recommend buying with a target price of VND 48,700 per share. "At this price, TCB, along with STB and MBB, is our top choice among Vietnamese banks," Maybank stated. Maybank estimates TCB's pre-tax profit for 2023 will reach VND 23 trillion.

A domestic financial institution, Ho Chi Minh City Securities Company (HSC), also noted many signs of recovery in TCB after the Q3 results, and maintained its buy recommendation with a target price of VND 40,000/share. Techcombank's current price-to-book ratio (P/B) is only 0.8x, about 19% lower than the average for bank stocks.

Speaking on behalf of the bank, Mr. Jens Lottner, CEO of Techcombank, stated: "Techcombank recorded stable business results in the third quarter, closely following our forecasts, amidst signs of economic recovery. The bank continued to expand, attracting 2.2 million new customers in the first nine months of the year. Income from investment banking and insurance services achieved significant growth in the third quarter, helping us maintain the growth momentum in service income."

Current account balances (CASA) have grown for two consecutive quarters, reinforcing the bank's CASA growth momentum. Credit and deposit growth rates were higher than the industry average in the first nine months of 2023. With the results achieved in the third quarter, the Bank is confident of achieving its profit and asset quality targets for the entire year."

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