BID released H1 2022 results with TOI of VND34.4tn (USD1.5bn; +7.8% YoY) and NPAT-MI of VND8.8tn (USD382mn; +39.3% YoY), achieving 49.9% and 53.7% of our FY 2022 forecasts, respectively. The increase in the bottom line was mainly due to (1) a 15.5% YoY increase in NII, (2) 54.1% YoY increase in gains from FX trading and (3) 12.2% YoY decrease in provision expenses, which were partly offset by a 12.5% YoY decrease in pure NFI and 16.8% YoY increase in OPEX.  On a quarterly basis, Q2 2022 NPAT-MI was VND5.2tn (46.1% QoQ and 42.6% YoY). We see slight upside to our earnings forecasts for BID, pending a fuller review.

Q2 2022 credit growth was at the same pace as Q1 2022; 6M 2022 credit growth moved closer to the initial credit quota. BID recorded Q2 2022 credit growth of 4.5% QoQ (vs 4.6% QoQ in Q1 2022), in which loans to customers increased 4.6% QoQ and the corporate bond balance decreased 2.4% QoQ. 6M 2022 credit growth was 9.4% vs the bank’s initial credit quota of 10%. In addition, 6M 2022 deposit growth was slow at 1.9%. 

Similar to CTG, BID also reported a QoQ increase in Q2 2022 NIM. BID reported that H1 2022 NII increased by 15.5% YoY on the back of strong 6M 2022 loan growth; meanwhile, H1 2022 NIM decreased by 10 bps YoY. The decrease in H1 2022 NIM was the result of a 39-bp YoY decline in the IEA yield that outweighed a 30-bp YoY decrease in COF. The former could be driven by support packages for customers affected by COVID-19, while the latter could be due to a 2x YoY increase in interbank funding. On a QoQ basis, Q2 2022 NIM rose by 21 bps QoQ thanks to a 17-bp QoQ increase in the IEA yield and a 4-bp QoQ decrease in COF. We believe the QoQ NIM improvement could be due to (1) a significant improvement in restructured loans, (2) BID’s better loan pricing amid the tight remaining credit quota in Q2 2022 at other banks and/or (3) a lower amount of support packages offered in Q2 2022 relative to Q1 2022.

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