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VCB - Earnings suppression continues, focus on audited Q4 2017 - Earnings Flash

Summary – VCB released Q3 2017 results that are largely line with our forecast. Although NIMs contracted slightly, a 6.1% Q-o-Q reduction in provision expense led to a modest surge in net profit growth from Q2 2017. Provisions continued to grow ahead of NPLs and the excess provisions suppressed earnings again in Q3, as expected. While prudent, only the audited Q4 2017 NPLs would enable us to form a view on future provisioning costs and normalized earnings.