Experts expect a bank stock to rise by nearly 36%

MBS assesses that this bank is significantly improving its asset quality, and profits could maintain double-digit growth for the next two years.

MB Securities (MBS) recently published a report on Tien Phong Commercial Bank (TPBank - Code: TPB) with the assessment that "Asset quality is improving, growth is stable."

In the report, MBS issued a POSITIVE recommendation for TPB shares, with a target price of VND 21,000 per share. Compared to the market price at the time of reporting, MBS estimates that TPB shares still have room for growth of approximately 35.6%.

2025 Profits Exceed Plan, Q4 Sets New Record

According to MBS, TPBank recorded positive business results in 2025, exceeding the set plan. Pre-tax profit for the whole year reached VND 9,203 billion, an increase of 21.1% compared to 2024 and completing 102% of the annual plan.

Notably, the bank experienced a strong surge in the final quarter of the year, with pre-tax profit reaching VND 3,155 billion, a 48% increase year-on-year and a record high quarterly profit for the bank.

The report indicates that the main drivers of profit growth came from improved non-interest income and a significant reduction in credit risk provision expenses.

In 2025, the net interest margin (NIM) decreased by 50 basis points. Therefore, net interest income only increased slightly by 3.6% year-on-year. Meanwhile, non-interest income increased by 9.3% to VND 5,610 billion thanks to contributions from various activities such as service fees, foreign exchange trading, and other income.

Specifically, net fee income increased by 23.6% year-on-year, foreign exchange trading increased by 117.6%, and net other income increased by 30.6%.

Conversely, credit risk provisioning costs for the whole year reached VND 3,201 billion, a decrease of 23% compared to 2024 thanks to significantly improved asset quality. This reduction in provisioning costs significantly supported the bank's profit growth over the past year.

Besides its business results, TPBank continues to maintain a high credit growth rate among large and medium-sized private banks. By the end of 2025, the bank's consolidated loan balance increased by 19.6% compared to the beginning of the year.

In addition, TPBank's capital mobilization also grew strongly. Total deposits in 2025 increased by 20.9% compared to the beginning of the year.

Notably, TPBank also significantly improved its asset quality. The non-performing loan ratio at the end of 2025 decreased to 1.29%, 23 basis points lower than at the beginning of the year and 94 basis points lower than the previous quarter. This is also the lowest level of non-performing loans in the last three years.

In 2025, the bank used approximately VND 2,680 billion in provisions to handle non-performing loans, a 29% decrease compared to the previous year.

In addition, the loan loss reserve (LLR) ratio increased to 92.5%, 11.2% higher than in 2024. MBS believes that the provision buffer was significantly strengthened thanks to the good recovery of asset quality.

MBS forecasts TPBank's profit to increase by over 16% annually in the 2026-2027 period

Regarding the outlook, MBS forecasts that TPBank's pre-tax profit will continue to maintain double-digit growth in the 2026-2027 period. Specifically, pre-tax profit in 2026 could reach approximately VND 10,695 billion, an increase of 16.2% compared to 2025. In 2027, profit is expected to reach VND 12,404 billion, equivalent to a growth rate of approximately 16%.

The growth drivers in the coming period will come from the recovery of net interest income and the maintenance of low credit costs thanks to improved asset quality.

MBS forecasts TPBank's credit growth could reach approximately 13.6% in 2026 and 12.9% in 2027, driven by expectations of continued strong growth in corporate lending due to attractive interest rates, while retail lending is expected to continue recovering.

However, the bank's Net Interest Margin (NIM) is projected to remain under short-term pressure. The NIM in 2026 could fall to around 2.9% due to funding costs increasing faster than lending interest rates.

Nevertheless, MBS believes the NIM could gradually improve from the end of 2026 and become more pronounced in 2027 thanks to the recovery of the retail segment, combined with the fact that mortgage loans whose preferential terms have expired will begin to float according to interest rates – which are expected to gradually increase.

In addition to its core banking operations, TPBank is also gradually building a financial ecosystem to diversify its revenue streams. The bank has increased its ownership stake in TPS Securities Company, completed its capital contribution to Viet Cat Fund Management Company, and established TPBank Asset Management and Debt Collection Company Limited (TPBank AMC) with a charter capital of VND 100 billion to be more proactive in handling non-performing loans.

MBS believes that expanding its financial ecosystem will help TPBank increase non-interest income and achieve a more sustainable income structure.

Currently, non-interest income accounts for over 27% of the bank's total operating income in the last five years and could increase to approximately 30% in the 2026-2027 period.

Regarding capital base, TPBank maintains a high capital adequacy ratio within the industry. The bank's CAR is approximately 13.7%, creating room for credit expansion while still ensuring capital adequacy standards.

The bank has also announced compliance with Circular 14/2025/TT-NHNN using the standard method and continues to register for the implementation of the internal rating method. Possessing a strong capital adequacy foundation gives TPBank an advantage in expanding its ecosystem while maintaining credit growth high.

Despite the positive outlook, MBS also noted several risks that could affect TPBank's business results in the coming period. The biggest risk is the possibility of a sharper-than-expected decrease in NIM and a significant increase in provision costs.