SAHABANK (HOSE: SHB) | Initiation Report, BUY – FW2026 Upside +29.1%

Company Information

Saigon - Hanoi Commercial Joint Stock Bank (SHB), formerly Nhon Ai Rural Commercial Joint Stock Bank, was established in 1993 in Can Tho with initial charter capital of VND 400mn. Over three decades of operation, the bank has undergone significant structural transitions, including its 2006 rebranding and 2012 merger with Habubank, followed by its official listing on HOSE in 2021. As of 2025, SHB ranks among the top five private commercial banks in Vietnam by charter capital, reaching approximately VND 46tn. The bank currently operates a network of 587 transaction branches and offices across 50 provinces and international markets.

Financial Performance

SHB’s 2025 TOI expanded by 21.3% YoY to VND 22.2tn, underpinned by a 258% YoY surge in Non-NII to VND 8.4tn. This performance was attributable to intensified payment activities (+160% YoY) alongside VND 4.9tn in other income, which included an estimate of VND 1.6tn in profit realized from the 50% divestment of SHB Finance. Taken out the non-recurring gain, Non-NII amounted to VND 4.75tn (+184% YoY). NII, which accounted for 71% of TOI in 2025, declined 4.8% YoY. The contraction was mainly attributable to rising interest rate in late 2025, which pushed overall CoF to 5.1% in year-end compared to 4.7% of 2024 and compressed NIM to a low of 2.67%.

SHB’s 2025 PBT reached VND 15tn (+30% YoY), achieving 104% of the annual target. NPAT followed suit, rising 28.8% YoY to VND 12tn. However, excluding a non-recurring gain of VND 4.9tn, normalized NPAT declined 22% YoY to only VND 7.27tn.

Total assets expanded 19.4% YoY to VND 892.6tn, positioning SHB among the top six largest Private Commercial Banks by asset size. Customer loans increased 18.3% YoY to VND 614.8tn, primarily driven by corporate lending, which amounted to VND 513tn (+17.6% YoY). Customer deposits rose 14.5% to around VND 572tn, with the CASA ratio improving to 8.4% (from 7.8% at end-2024). Asset quality remained well controlled, with the NPL ratio maintained at a record low of 2.12% from 2.9% in 2024 following substantial write-offs of Group 5 loans.

Investment Rationales

o      Sustained High ROE with Industry-Leading Cost Efficiency.

o      Strong Assets Growth Momentum with Improving Assets Quality.

o      Capital Upside and Foreign Ownership Headroom.

o      Attractive Valuation with Re-rating Potential.

Valuation and Recommendations

We apply a Residual Income and P/B valuation approach to determine SHB’s fair value, assigning equal weights of 50% to each method. We issue a BUY recommendation with a 12-month target price of VND 19,300 per share, implying an upside of 29.1% from the closing price of VND 14,950 per share as of March 12, 2026.