VCB – Strong topline and lower provisioning drive profits

■ VCB’s net profit grew 20% yoy in 1QFY17, driven by strong operating income growth and easing provisions that offset a hike in operating expenses.
■ 1QFY17 net profit made up 27% of our full-year forecast.
■ We expect VCB to sustain its 18-20% net profit growth during FY17-20F.
■ Maintain Add. We believe the recent share price pull-back offers a good entry point into Vietnam’s largest-market-cap bank with an industry-leading business position.