VPBank (HOSE: VPB) | 3Q26 Update, BUY – Upside +27.0%

Record Profitability On Strong Credit Growth Despite Rising Funding Costs

3Q26 Performance

VPB sustained strong earnings momentum in 3Q26, with consolidated PBT reaching VND 11,031bn (+20.3% YoY), marking its second consecutive quarter of record profitability. 9M26 PBT rose 46.7% YoY to VND 29,911bn, equivalent to 86.4% of our FY26E forecast. Earnings growth was underpinned by robust credit expansion and resilient core banking income, although rising funding costs and weaker trading-related income increasingly weighed on earnings quality.

Customer loans grew 28.4% YTD to VND 1,212tn, supported by corporate, SME and retail lending, while total funding reached VND 987tn (+42.6% YoY). Retail deposits rose 36% YTD, supported by diversified funding sources. However, funding cost pressure persisted, with the cost of funds rising to 5.7% in 3Q26 from 5.2% in 2Q26, while NIM remained at 5.3%.

Asset quality improved primarily on FE Credit's recovery, with its NPL ratio improved to 9.6% from 11.9% in 2Q26, while parent-bank NPLs remained stable at 2.5%. However, the LLR ratio declined to 54.0% from 56.2%, leaving limited provisioning buffers amid elevated borrowing costs. Meanwhile, GPBank's restructuring progress and VPLife's planned launch in 1Q27 offer longer-term diversification potential, although their contributions will take time to materialize.

Earnings Outlook

We expect VPB to sustain strong earnings growth in FY27E, supported by continued credit expansion and broader contributions from its financial ecosystem. We forecast FY27E TOI of VND 117,839bn (+26.7% YoY) and NPAT-MI of VND 34,679bn (+26.9% YoY), assuming credit growth of 26.7%, NIM of 5.4% and an average NPL ratio of 3.6%. Our outlook assumes gradual margin recovery and a cautious credit cost profile, reflecting persistent funding cost pressure and potential lagged asset quality risks.

Target Price and Rating

We revise our 12-month target price to VND30,450/share from VND35,100/share, primarily reflecting the dilution effect of the 26.04% stock dividend, which increased charter capital from VND 79tn to VND 100tn. Based on the closing price of VND 24,000/share as of 20 October 2026, our revised target price implies 27.0% upside.

We reiterate our BUY rating, supported by strong earnings growth prospects and attractive upside potential, while recognizing risks surrounding funding costs and asset quality.