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EIB - HOLD - Slow Growth + Credit Costs = Weak Earnings - Initiation

Eximbank (EIB) is the 6th largest bank in Vietnam in terms of total assets, and is focused on SME and retail lending. Following an outstanding earnings performance in FY2011, we look for EIB to greatly undershoot its FY2012 full-year target of VND4,600 billion in pre-tax earnings. Our own forecast calls for only VND3,394 billion in pre-tax earnings due to stagnant credit growth and provision charges to cover rising NPLs.