Techcombank (HOSE: TCB) | Q1 2026 Update, BUY – 1Y Upside +29.1%

Resilient Earnings Supported By Ecosystem-Driven Fee Income Amid Funding Cost Pressure

In Q1 2026, NII declined 11.7% QoQ to VND 9,522bn despite continued loan growth, as funding cost surged during the quarter. COF increased sharply by 40bps QoQ to 3.7%, outpacing the 17bps QoQ increase in lending yields to 7.8%. However, non-NII remained resilient, increased 25.6% YoY and 3.6% QoQ to VND 4,152bn, mainly driven by strong service income growth and a sharp recovery in insurance income. As a result, TOI reached VND 13,674bn (+17.8% YoY, -7.6% QoQ), while PBT came in at VND 8,870bn (+22.6% YoY, -3.1% QoQ), completing 26.0% of our FY2026 forecast and approximately 24.5% of management’s full-year guidance.

Loans to customers reached VND 797tn (+3.8% YTD), mainly driven by continued retail and SME lending expansion. Meanwhile, customer deposits declined 3.1% YTD to VND 600tn due to softer CASA balances amid elevated interest rates.

The broader TCB ecosystem spanning from securities, insurance, and capital markets, further diversified the bank’s income base beyond traditional lending activities. TCBS delivered revenue of VND 2.78tn (+37% YoY) and PBT of VND 1.46tn (+11% YoY), maintaining strong positions in corporate bond issuance, brokerage, and margin lending. TCBS maintained a Top 3 brokerage market share position on HOSE with 8.9% market share. Meanwhile, Techcom Life recorded APE of VND 400bn (+2.2x YoY), reaching 148% of plan, capturing 21% bancassurance market share to rank No.1 in the channel and 9% of total life insurance APE to rank Top 5 industry wide.

TCB also continues reinforcing its long-term capital position. The bank recently announced a large-scale capital increase plan, including the issuance of over 4.25 billion bonus shares at a 100:60 ratio and nearly 35.9 million ESOP shares, which could lift charter capital from VND 70.9tn to VND 113.7tn. The issuance is expected to be completed during 2026. Alongside this, TCB maintained shareholder returns through a 7% cash dividend, marking the third consecutive year of cash dividend payment.

We maintain our FY2026 forecast for TCB with TOI of VND 61,425bn (+15% YoY) and NPAT-MI of VND 28,547bn (+12.9% YoY). Accordingly, our FY2026 target price remains at VND 42,100/share, implying a 29.1% upside from the closing price of VND 32,600/share as of May 19, 2026. We therefore maintain our BUY recommendation on TCB.