MBB shares unexpectedly rise

22-Sep-2020 Intellasia | Dien dan Doanh nghiep | 6:02 AM Print This Post

Over the past several months, MBB shares of Military Commercial Joint Stock Bank (MBB) were still below 17,000 18,000 dong per share, then unexpectedly soared in the session on September 18th.

Closing the September 18th session, MBB shares reached 18,750 dong per share, the highest price of MBB in the past nine months. As a results, the liquidity rose to 11 million shares matched. This is also the record high trading volume of MB shares in the first nine months of the year. So what is special about MBB?

The financial statement in the second quarter (Q2) of 2020 showed that MBB’s net interest income was 4.624 trillion dong, up by 5.2 percent compared to the same period of last year. Many business segments of the bank also recorded positive results, in which the profit from foreign exchange trading was 181 billion dong, up by 10.5%, profit from securities trading was 217 billion dong, up by 167%; and profit from other activities increased by 28 percent to 538 billion dong. Thus, MBB’s Q2 profit reached 2.923 trillion dong, up by 19 percent over the same period of last year. In the first six months of the year, the bank’s consolidated pre-tax profit was 5.118 trillion dong, up by five percent over the same period of last year.

As of June 2020, MBB’s total assets were 421.635 trillion dong, up by 2.5 percent over the beginning of the year. The outstanding credit to customers was 261.384 trillion dong, up by 4.4%.

It can be said that in the first two quarters of 2020, many banks faced difficulties but MBB still achieved good profit growth thanks to the reduction of provisioning expenses. The lending expenses of the parent bank returned to a normal level of 1.8 percent from 3.2%. the bank’s restructured loans due to the impact of the Covid-19 pandemic accounted for nearly 2.7 percent of the total outstanding loans. the credit focused on the segment of large corporate customers. Recently, MBB has announced to achieve 7.6 percent credit growth in the end of Q2 2020. This new credit increase mainly came from the investment in corporate bonds which increased by 60 percent to 24 trillion dong.

These results are in line with MBB’s recent orientation of focusing more on large corporate customers rather than retail and Small and Medium Enterprises (SMEs) when the economic picture is gloomier due to the Covid-19 pandemic. In addition, MBB also has plan to increase the cross-selling between the parent bank and its subsidiaries.

KIS Securities Company expects that investment banking (bond consulting and issuing services) will be MBB’s core business in addition to bancassurance.

Thanks to the positive improvement of asset quality, KIS Securities has raised MBB’s controlling profit in 2020 to 7.5 trillion dong. according to KIS, MBB has found a suitable direction in the context when the economy is affected by the Covid-19 pandemic and cut down segments that bring high credit risks. Based on MBB’s trading history compared to other banks, KIS recommended a “buy” recommendation for MBB shares.

 


Category: Finance, Vietnam

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