SSI - RESEARCH & ADVISORY CENTER

31 July 2023

QUICK BANKING SECTOR UPDATE

Banks have released their financial statements over the last weekend. In overall, we found the 2Q23 results for banks under coverage in
line with what we had anticipated where earnings (+3% YoY and -1.2% QoQ) continued to be pressured with deceleration in credit growth
(+6.6% YTD or 2% QoQ), a further squeeze in NIM (-15 bps QoQ) and rising NPLs (+11 bps QoQ). The good news is net income from
fee-based services recovered QoQ and CASA appeared to have bottomed out for most banks.

• On credit growth: Credit growth was still weak on a QoQ basis for most banks. ACB, OCB, MBB and VPB had the strongest QoQ
growth of 5 – 6.5%. The driver for growth was trading, manufacturing, real estate & construction at MBB; household business &
real estate at VPB; working capital loans at ACB. Consumer finance credit continued to drop at FeCredit & MCredit while nudged up
slightly at HDSaison.

• On asset quality: The Tier-2 JSCBs (HDB, MSB, TPB, VIB), STB and VPB still suffered from further deterioration in asset quality.
However, new NPL & overdue debt formation rate at SoCBs, ACB, MBB and OCB has slowed down significantly compared to 4Q22
and 1Q23.

• On NIM trend: NIM was also quite solid amongst SoCBs as asset allocation was more balanced when there was no longer large
State Treasury of Vietnam (STV) deposits at those banks. In contrast, NIM continued to contract at JSCBs which could either be the
result of an excessive deposit growth (VPB, HDB), lower lending rate to support customers (TCB) or increase investment in bank
bonds (MBB).

All in all, we are still confident with our 2023 projection for the SoCBs, ACB, MBB, TCB. However, estimates are under review either due
to lower-than-expected NIM (VPB), higher-than-expected NPL formation rate (TPB, HDB), weaker-than-expected consumer finance
business (VPB, HDB) or robust non-interest income (OCB, MSB).

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The research analyst(s) on this report certifies that (1) the views expressed in this research report accurately reflect his/her/our own personal views
about the securities and/or the issuers and (2) no part of the research analyst(s)’ compensation was, is, or will be directly or indirectly related to the
specific recommendation or views contained in this research report.

RATING

Buy: Expected to provide price gains of at least 10 percentage points greater than the market over next 12 months

Outperform: Expected to provide price gains of up to 10 percentage points greater than the market over next 12 months.

Market Perform: Expected to provide price gains similar to the market over next 12 months.

Underperform: Expected to provide price gains of up to 10 percentage points less than the market over next 12 months.

Sell: Expected to provide price gains of at least 10 percentage points less than the market over next 12 months

In some cases, the recommendation based on 1Y return could be re-adjusted by the analysts after considering a number of market factors that could
have impact on the stock price in the short and medium term.

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The information, statements, forecasts and projections contained herein, including any expression of opinion, are based upon sources believed to be
reliable but their accuracy completeness or correctness are not guaranteed, Expressions of opinion herein were arrived at after due and careful
consideration and they were based upon the best information then known to us, and in our opinion are fair and reasonable in the circumstances prevailing
at the time, and no unpublished price sensitive information would be included in the report. Expressions of opinion contained herein are subject to
change without notice. This document is not, and should not be construed as, an offer or the solicitation of an offer to buy or sell any securities, SSI
and other companies in the SSI and/or their officers, directors and employees may have positions and may affect transactions in securities of companies
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