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CTG - HOLD - Overvalued, NPLs hamper earnings - Initiation

We initiate coverage on CTG, target price of VND18,000 (7% downside). Vietinbank (CTG) has emerged as one of the fastest growing banks in Vietnam for the past few years. But recent volatility in the economy and slow credit environment has exposed its weakness in income derived from service fees and heavy reliance on growth through aggressive lending. Thus, with the loan book actually shrinking by 3.1% in 1H, this fact does not bode well for earnings.