VIB (HOSE: VIB) | Q1 2026 Update, BUY – 1Y Upside +30.7%

Strong Earnings Growth Driven By Exceptional Non-Interest Income Performance

VIB delivered a strong Q1 2026, with PBT of VND 2,803bn (+15.8% YoY, +36.2% QoQ) completing 24.3% of management's full-year target and 27.6% of our projection. TOI reached VND 5,861bn (+27.4% YoY, +11.0% QoQ), completing 25.9% of our FY2026 forecast, driven by a sharp acceleration in non-NII, particularly from payment services.

NII grew 8.1% YoY to VND 4,039bn but declined 4.2% compared to Q4 2025. Deposit growth (+7.4% YTD) significantly outpaced credit expansion (+1.1% YTD) during the quarter, resulting in lower asset utilization. As a result, NIM remained broadly stable at 3.1%, improving only modestly by 3bps QoQ despite a sharp 115bps QoQ increase in lending yields. Asset quality and prudential ratios remained within management and regulatory thresholds, although provision coverage stayed thin relative to peers.

In AGM 2026, VIB announced a 9% cash dividend with  payment date June 3, 2026 (~dividend yield of 5.6%), a 9.5% stock dividend from retained earnings; and a 0.24% ESOP issuance of 8 million share, target execute in Q2-Q3 2026. If successful, charter capital will increase from VND 34,040bn to approximately VND 37,354bn.

2026 marks the final year of VIB's decade-long VIB 2.0 transformation (2017 - 2026) before the bank enters its next growth cycle, VIB 3.0 (2027 - 2036), targeting fast, sustainable, and innovation-driven expansion at scale. The strategy is built around five upgraded product pillars: digital credit, deposit optimization, cards, insurance and investment, and payment and transaction banking. Management also reaffirmed its ambition to become the market leader in cards within the next three years, supported by strategic partnerships with Visa and continued investments in digital payment infrastructure.

We maintain our FY2026 forecast for VIB with TOI of VND 22,644bn (+13.2% YoY) and NPAT-MI of VND 8,110bn (+11.3% YoY). Accordingly, our FY2026 target price remains at VND 21,050/share, implying a 30.7% upside from the closing price of VND 16,100/share as of May 15, 2026. We therefore maintain our BUY recommendation on VIB.