BIDV (HOSE: BID) | 2Q26 Update, HOLD – Upside +7.6%

Core Earnings Remained Resilient, But Asset Quality Deterioration Warrants Caution

BID 2Q26 Performance

BID delivered resilient 1H26 results, with core earnings supported by stable margin expansion despite a higher funding-cost environment. Although deposit competition lifted CoF by 37bps YTD to 3.9%, the impact was largely offset by loan repricing and an improving asset mix, resulting in a 4bps expansion in NIM to 2.17%. Strong operating income growth, together with healthy credit expansion (+5.4% YTD) that outpaced deposit growth (+1.7% YTD), drove TOI to VND 44.3tn (+10.9% YoY) and PBT to VND 18.9tn (+17.9% YoY), leaving earnings broadly on track to meet both management guidance and our FY26 forecasts.

While operating performance remained resilient, asset quality showed signs of deterioration. Gross NPLs increased 30.7% YTD to VND 45.7tn, driven primarily by a sharp rise in Group 3 (+2.7x YTD) and Group 4 loans (+55.9% YTD). As a result, the NPL ratio increased to 1.8% from 1.5% at end-2025 (+35bps YTD, +7bps QoQ).

We expect BID's earnings growth to remain resilient in 2H26, supported by steady credit expansion and gradual NIM improvement as higher-yield loans are repriced. However, asset quality remains the key watchpoint. Elevated new NPL formation and a lower LLR to keep provisioning costs above historical levels, limiting upside to earnings.

Target Price and Rating

Given that 1H26 results were broadly in line with our expectations, we maintain our FY26 forecasts, projecting TOI of VND 97.3tn (+11.8% YoY), PBT of VND 40.4tn (+14.6% YoY) and NPAT-MI of VND 31.7tn (+6.0% YoY). 

We also raise our risk-free rate assumption to 8.0% (vs. 4.5%previously), benchmarked against the prevailing 12-month deposit rate.

We lower our TP 2026 to VND 42,000/share (from VND 45,800/share). Based on BID's closing price of VND 39,050/share on 7 August 2026, our revised target price implies a 7.6% upside. We therefore reiterate our HOLD recommendation.