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In March, Nam A Bank (code: NAB) was listed on the HOSE. DNSE has recommended investors buy NAB stock with a 12-month price target of 22,800 VND per share, a potential increase of over 35% compared to the current market price as of May 3, 2024.
DNSE set a P/B target for NAB at 1.3 times, higher than the current P/B of 1.1 times, as they believe that the bank’s move to the HOSE (from UPCoM) will attract more investor interest and that NAB has strong long-term growth potential.
Price movement of NAB shares over time.
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This expected stock price growth is well-founded, as DNSE forecasts a 17.7% increase in Nam A Bank’s post-tax profit for 2024, followed by a 15.4% increase in 2025. The bank itself has set a pre-tax profit target for 2024, approved by its recent shareholders’ meeting, at a 21% increase.
According to analysts, Nam A Bank’s core customer segments will recover strongly as the economy rebounds in the second half of 2024, leading to the bank’s increased interest-bearing assets. The bank’s NIM is expected to be maintained at 3.6-3.7% in 2024-2025 and gradually improved to 3.8% in 2026-2028.
As a result, Nam A Bank’s net interest income is projected to increase by 10% year-over-year in 2024 and by 16.7% in 2025.
Customers at Nam A Bank.
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Regarding non-interest income, DNSE attributes the bank’s primary source to fee and card management activities. The signing of a new bancassurance contract is expected to positively impact non-interest income growth in the coming period.
Looking back at Nam A Bank’s performance, it has created positive impressions and laid the foundation for sustainable development. In 2023, the bank’s total assets grew by 18%, reaching 102% of its plan, with nearly VND 210,000 billion. Income-generating assets accounted for 97% of total assets. Capital mobilization reached nearly VND 164,000 billion, an increase of 19%, surpassing the plan by 6%. Credit grew by 18%, completing 107% of the plan, with total outstanding loans of more than VND 141,000 billion. Pre-tax profit exceeded VND 3,300 billion, a 46% increase compared to 2022, achieving 127% of the plan.
The cost-to-income ratio (CIR) significantly improved from 64.3% in 2018 to 45.7% in 2023. Additionally, the average compensation per employee at NAB grew positively by 19.9% during 2018-2023, indicating the bank’s focus on technology adoption and human resource quality enhancement.
Regarding loan loss provisions, Nam A Bank has fully settled its debt with VAMC in 2023. With this resolution, the bank will face less pressure on provisioning in the next phase, allowing for accelerated profit growth in the subsequent period.
Most recently, Nam A Bank announced its Q1 2024 financial results, with quarterly profits reaching nearly VND 1,000 billion for the first time. Other business targets were also met, including total assets exceeding VND 216,000 billion, a 6,275 billion increase from the beginning of the year, and achieving 93% of the annual plan. Capital mobilization reached VND 167.2 billion, and loan balances reached nearly VND 146.7 billion, increasing by 2.05% and 3.76%, respectively, compared to the beginning of the year…
These positive results lay the groundwork for Nam A Bank to achieve its 2024 business targets, boost its stock price, and realize its strategy to become one of the Top 15 strongest banks in Vietnam.
