BIDV (HOSE: BID) | Q2 2025 Update, ADD – 1Y Upside +8.7%

In H1 2025, PBT reached VND 16,038bn (+3.1% YoY), equivalent to 45.5% of our FY2025 forecast, supported by strong Non-NII growth (+22.6% YoY) driven mainly by a 168.4% YoY surge in other income from debt recoveries. NII in H1 2025 increased modestly by 2.0% YoY to VND 28,937bn, as the impact of credit growth was largely offset by lower lending rates and NIM contracted to 2.0% (from 2.4% in H1 2024).

As of August 14, BID delivered a 12.3% YTD return and gained 17.1% since our initiation was released in May 2025. We roll forward our target price to mid-2026, revising target price to VND 45,800/share, implying a potential upside of 8.7% from the August 14 closing price of VND 42,150/share. Accordingly, we downgrade our recommendation from BUY to ADD.

We remain positive on BID’s long-term outlook, supported by its unique role as a state-owned bank positioned to finance Vietnam’s major infrastructure projects. We expect BID to benefit from reasonable credit growth, potential NIM expansion, improved cost efficiency, and stronger non-interest income in H2 2025 and beyond.

We also see a potential catalyst from Vietnam’s possible upgrade to emerging market status (either in September 2025 or March 2026), which could lead to BID’s inclusion in the FTSE Emerging Markets Index. In this scenario, given the bank’s strong positioning to attract new FII inflows, we would apply a 10% premium to our base-case target P/B multiple, raising it to 2.0x from 1.8x. This would imply a target price of VND VND 50,500/share, representing a 19.8% upside from the current level.