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MBB - H1 2016 earnings growth is the result of lower provision expense - Earnings Flash

5.3% Y-o-Y H1 2016 earnings growth was ahead of our expectation due to significantly reduced provision expense, but overall performance was not good as both interest and non-interest income reported negative growth. The bank is lagging in provisioning for VAMC bonds, so we expect provision will increase in the remaining quarters. We will reiterate MARKETPERFORM rating for this bank as the earnings outlook is yet to improve in FY16.