Techcombank (HOSE: TCB) | 2Q26 Update, BUY – Upside +23.4%

Solid Earnings Growth Despite Funding Cost Pressures Emerged

TCB 2Q26 Performance

TCB reported solid 2Q26 results, with TOI reaching VND 14,942bn (+17.3% YoY, +9.3% QoQ) and PBT increasing to VND 9,670bn (+22.4% YoY). Earnings growth was supported by robust loan expansion, resilient core banking operations, strong fee income growth, and lower provisioning expenses, despite continued pressure on funding costs. As a result, 1H26 PBT reached VND 18,540bn (+22.5% YoY), fulfilling 50% of both management's FY2026 guidance and our previous full-year forecast.

Customer loans expanded by 10.4% YTD to VND 847tn, significantly outperforming the industry's 7.7% credit growth, driven mainly by infrastructure-related corporate lending. Including corporate bond holdings, total credit increased 13.1% YTD to VND 987tn. Meanwhile, CASA recovered to an industry-leading 35.0% (38.3% including Auto-Earning balances), supported by strong corporate deposit inflows, reinforcing TCB's structural funding advantage despite tighter system liquidity and rising deposit competition.

Asset quality remained resilient in 2Q26, with the NPL ratio broadly stable at 1.08% and credit cost remaining low at 0.4% in 1H26. However, we expect NPL formation to increase in 2H26 as persistent liquidity tightness constrains funding access and increase default risks for SMEs, while the potential stricter implementation of CIC loan classification could accelerate the recognition of non-performing loans.

Earnings Forecast

We revised down our FY26E NPAT-MI forecast by 6.9% to VND 26,573bn (+5.1% YoY), reflecting a more cautious outlook for NIM and assets quality. Although lending yields continue to improve, we lowered our FY26E and FY27E NIM forecasts to 3.6% and 3.7%, respectively, as elevated funding costs are expected to persist in a prolonged tight-liquidity environment. We maintain a prudent NPL assumption of 1.2%. Our FY27E NPAT-MI is reduced by 7.3% to VND 30,746bn (+15.7% YoY).

We also increased the risk-free rate in our valuation from 5.0% to 8.0%, reflecting the current interest-rate environment, and lowered our target P/B multiple from 1.7x to 1.5x.

Target Price and Rating

We revised down our TP 2026 from VND 42,100/share to VND 35,050/share, primarily reflecting our lower earnings forecasts driven by more conservative operating assumptions. TCB closed at VND 28,400/share on 29 July 2026, implying a potential upside of 23.4% to our revised TP. We therefore maintain our BUY rating for the stock.