VPBank (HOSE: VPB) | Q2 2026 Update, BUY – Upside +38.5%

Q2 2026 Performance

VPB delivered another strong quarter in Q2 2026, with consolidated TOI reaching VND23,484bn (+43.7% YoY, +18.0% QoQ) and PBT climbing to a record VND10,959bn (+76.3% YoY, +38.4% QoQ). As a result, H1 2026 PBT reached VND18,880bn (+68.1% YoY), fulfilling 45.7% of management's FY2026 target and 50.2% of our previous full-year forecast. Earnings growth was driven by above-industry credit expansion, resilient core banking operations and stronger contributions from ecosystem companies, particularly VPBankS and OPES.

Customer loans expanded 23.0% YTD to VND1,161tn, mainly driven by the corporate and SME segments, while total assets surpassed VND1.5 quadrillion (+19.2% YTD). Funding growth remained solid, allowing VPB to maintain a Basel II CAR of around 13%, among the highest in the sector. However, elevated funding costs continued to weigh on profitability, with H1 2026 NIM narrowing to 5.3%.

Asset quality improved during the quarter, with the consolidated NPL ratio declining to 3.28% at end-Q2 2026 from 3.58% at end-Q1, while the LLR ratio increased to 56.2%. However, FE Credit remained the key overhang, with H1 2026 PBT declining 42.8% YoY to VND153bn due to weak credit growth, elevated funding costs and a higher NPL ratio of 11.9%. Given the prolonged high-interest-rate environment, we believe asset quality could deteriorate in H2 2026.

Earnings Forecast

We revised loan growth to 32.6% (from 25.2%) and deposit growth to 25.0% (from 20.0%) in FY2026, reflecting stronger-than-expected corporate lending and sustained funding momentum. At the same time, we revised average NIM in 2026 to 5.3% (from 5.5%) and NIM in 2027 to 5.4% (from 5.7%), while NPL is estimated at 3.6% in 2026 and 2027 (from 3.4%) to reflect continued margin pressure and elevated credit risks.

As a result, we reduced our FY2026 NPAT-MI forecast by 8.0% to VND27,334bn (+13.9% YoY, 16.2% below management's FY2026 guidance), and lowered our FY2027 NPAT-MI forecast by 6.1% to VND34,679bn (+26.9% YoY).

We also increased the risk-free rate in our valuation from 5.0% to 7.0%, aligning it with the current interest-rate environment, and reduced our target P/B multiple from 1.7x to 1.5x.

Target Price and Rating

We revise down our 12-month Target Price to VND 35,100/share (from VND 39,900/share) and maintain our BUY rating on VPB. Based on the closing price of VND 25,350 as of 21 July 2026, the stock offers an upside potential of 38.5%.

We believe VPB's current valuation at 1.0x FY2026F P/B is attractive relative to the banking sector average of 1.3x. VPB’s ROE is quite solid at 17.8%, well above the sector average, with resilient outlook.