BVBank (UPCOM: BVB) | Initiation Report, BUY – FW2026 Upside +20.3%

Company Information

Originally established as Gia Dinh Commercial Joint Stock Bank, BVB underwent a major restructuring in 2011 with the entry of new strategic shareholders and was subsequently rebranded. Over the past decade, the bank has positioned itself as a young and agile institution, focusing on retail, SMEs, and technology-driven solutions.

By the end of H1 2025, BVB’s total assets reached VND 115,509bn, underpinned by a footprint of 126 transaction points across 22/34 provinces and cities, with a strategic concentration in Ho Chi Minh City and southern provinces.

Financial Performance

Between 2020 and 2023, BVB pursued a cautious operating strategy, focusing on assets restructuring and strengthening its risk management framework. Business performance during this period remained subdued.

Starting from 2024, BVB delivered a strong turnaround, with PBT reaching VND 391bn, 5.5x higher than 2023 and well above the initial target of VND 200bn. Growth was primarily driven by stronger net interest income (NII) and disciplined cost control. Asset quality also improved, with the NPL ratio falling to 3.09% at end-2024 from 3.31% in 2023, while its CIR declined significantly from 80.2% to 59.5%.

In H1 2025, BVB reported TOI of VND 1,241bn (+6.7% YoY), supported mainly by a 12.3% YoY increase in NII. However, operating expenses rose 17.0% YoY to VND 821 bn, and credit provisions increased 5.8% to VND 327bn. As a result, PBT dropped 38.8% YoY to VND 93bn, completing only 17.0% of the full-year target. We spoke to management, and they are confident of achieving 2025 full year target.

Investment Rationales

We identify BVB as an interesting alpha stock in the banking sector. Business results are improving quickly from the low base and small size. The upward sector cycle could provide a great chance for the bank to size up ahead. Our investment thesis for the stock rests on the following points:

1. Solid earnings growth potential

BVB’s smaller scale positions the bank to accelerate more swiftly than larger peers through capital raising and leveraging its strategic advantages:

o   Strengthened capital base to support credit expansion: BVB plans to raise its Tier 1 capital from VND 6,918bn to VND 12,000bn in 2026, providing ample capacity to fund stronger credit growth and enhance capital buffers. The bank’s capital adequacy ratio (CAR) has already improved meaningfully, from 11.85% in 2024 to 14.14% as of end-H1 2025, offering comfortable headroom for further loan expansion while maintaining compliance with Basel II/III requirements. Its capital raising would allow BVB to stay ahead of the small banking group in terms of equity size and gradually catch up with the mid-size names such as ABB, NAB, and EIB.

o   Strategic partnerships to accelerate digital lending and payments: BVB is expanding collaborations with leading fintech partners such as MoMo, Timo, and Kredivo to leverage their extensive distribution networks. Digital lending through MoMo, Kredivo, and other partners is projected to reach nearly VND 20,000bn by 2028, equivalent to around 15% of total loans to customers. These partnerships not only enable BVB to tap into underserved retail and SME segments but also allow the bank to acquire customers at a lower cost compared to traditional channels.

o   Digitalization driving operational efficiency: BVB’s ongoing digital transformation is enhancing productivity and enabling tighter cost control through process automation, online customer acquisition, and data-driven lending operations. As digital lending expands, the bank is able to scale efficiently with lower operating expenses and reduced reliance on traditional branch networks. Consequently, we forecast BVB’s cost-to-income ratio (CIR) to decline from around 60% in recent years to 47% by 2028. This would help improve the profitability of BVB ahead.

2. HOSE listing in 2026 as an important trigger

BVB is currently trading on the sideboard (UPCoM); thus, it is out-of-reach for most institutional investors. The bank plans to switch its listing to the mainboard (HOSE) in 2026. The move will improve trading liquidity, enhance transparency, and expand access to the mainstream of market liquidity from both local and foreign investors.

3. Potential to revaluate

At the current market price, BVB is trading at ~1.3x TTM P/B, significantly below the sector average of 1.9x. Its FW2026 P/B is lower at 1.2x times. This sizable discount is mainly contributed by its small size and being listed on UPCoM. As the bank is switching to the mainboard and growing its business quickly, we believe that there is ample room for the stock to be re-rated ahead.

Valuation and Recommendations

We apply two valuation methods Residual Income (30% weight) and Price-to-book (70%) to determine the fair value of BVB. We initiate a BUY recommendation with a FW2026 target price of VND 17,200/share, +20.3% from the closing price of VND 14,300/share as of Oct 07, 2025. For long-term 3 years horizon, we value BVB at VND 22,100/share (+54.5%).