We raise our target price (TP) for BID by 2.5% to VND45,300/share but downgrade our rating from BUY to OUTPERFORM as BID’s share price has increased ~15% in the past three months.

Our higher TP is mainly due to a 9.5% increase in our projection for aggregate 2022-2026F NPAT-MI and an increase in our target P/B from 2.1x to 2.2x following an upward revision in our assumption for BID’s target P/B premium relative to peers, which is partly offset by an increase in our house cost of equity from 12.5% to 13.0%.

The increase in our 2022-2026F earnings is underpinned by a 12.1% aggregate decrease in provision expenses as we lower our assumption for 2022-2026F average credit cost from 1.46% to 1.28%, which is partly offset by (1) a 3.2% aggregate decrease in pure NFI and (2) 13.0% aggregate decrease in net other income.