BIDV (HOSE: BID) | Initiation Report, BUY –1Y Upside +19.2%

Company Information

Established in 1957, Joint Stock Commercial Bank for Investment and Development of Vietnam (BID), is the oldest commercial banks in Vietnam. BID currently plays a key role in the country’s financial system, with a comprehensive product offering, including loans, deposits, payments, cards, insurance, securities, and other financial products.

BID was listed on the Ho Chi Minh Stock Exchange (HOSE) in 2014. As of 2024, BID ranks first in the Vietnam banking sector in terms of total assets, total outstanding loans, and customer deposits, and ranks second in terms of market capitalization among listed banks.

Financial Performance

BID achieved solid performance over the past 3 years. It recorded net interest income (NII) of VND 58,008 billion (bn) in 2024, growing at an average of 7.4%/year for the 2021-2024 period. Non-interest income (non-NII) witnessed impressive performance, increased 36.6% in 2024, reaching VND 23,053 bn. Over the past 3 years, non-NII grew at 13.7% per annum.

BID maintained solid operating efficiency, with a cost-to-income ratio (CIR) ranging between 32–34% over the past three years. The non-performing loan (NPL) ratio was kept below 1.4%, while the loan loss reserve (LLR) ratio reached 131% by the end of 2024, significantly higher than industry average. Despite its conservative provision, BID achieved a TOI of VND 81,061 bn (+11.0%) and PBT of VND 32,009 bn (+14.8%) in 2024.  

As of end Q1/2025, total assets of BID reached VND 2.9 quadrillion (+3.5% YTD). Customer loans accounting for 72.4% and the investment securities making up 9.8% of total assets. Additionally, BID completed a private placement to foreign investors, raising VND 4,752 bn and increased its equity capital to VND 70,124 bn, providing additional equity capital to support future credit expansion and business growth.

Key Investment Rationales

o       The Undisputed Market Leader in The Banking Sector in Vietnam with A Unique Positioning

o       Enjoy The Significant Public Investment Cycle and Government-Led Stimulus Initiatives To Boost Economic Growth

o       Solid Earnings Recovery Ahead

o       Prudent Asset Quality and Risk Management

o       Attractive Valuation, Potential to Rerate Thanks to The EM Upgrade

Valuation and Recommendation

We use three valuation methods — Residual Income (RI), Price to Book (P/B), and Sum of The Parts (SOTP) — to determine the fair value of BID. We initiate a BUY recommendation with a 12-month target price of VND 42,900/share (+19.2% from the closing price of VND 36,000 per share as of May 22, 2025). Over the longer term (3 years), we value BID at VND 59,600/share (+65.6%).