BID [MARKET PERFORM +2.3%] - Prudent LLR to mitigate pressure on credit costs

- We raise our target price (TP) for BID by 11.2% to VND46,500/share and maintain a MARKET PERFORM rating.

- Our higher TP is mainly due to a 11.4% increase in our forecast for aggregate 2023-2027F NPAT-MI and a decrease in our cost of equity for BID from 14.5% to 14.2% due to an updated beta.

- The increase in our 2023-2027F earnings is underpinned by (1) a 5.3% aggregate increase in NII as we raise our average assumption for credit growth from ~9.5% to 11.5%, (2) an 8.6% aggregate increase in NFI (including FX trading) and (3) 5.6% aggregate increase in other income, which are partly offset by a 4.0% aggregate increase in provision expenses.