Real estate – a key driver for TCB's credit growth

On June 23, TCB stock surged toward its record, reaching VND 34,700 per share with a trading volume of 25.1 million shares. From the beginning of the year to June 23, TCB has gained nearly 40%, making it one of the most promising stocks among private banks in the VN30 index.

According to a report by VNDirect Securities, real estate is expected to remain the key driver of TCB’s credit growth in 2025. VNDirect projects a credit growth rate of 18.5%, surpassing the assigned credit quota of 16.4%, supported by a recovering real estate market. As of Q1/2025, home loans account for 29.9% of TCB’s total outstanding loans, while real estate-related corporate lending makes up 42.1%, underscoring the sector's significant influence on the bank.

In Hanoi, one of TCB's core markets, apartment supply and transactions have jumped over 70% year-over-year, with selling prices rising more than 20%.

Experts note that the improving market outlook is expected to boost borrowing demand from both individual and corporate customers. Although a low interest rate environment is likely to continue putting pressure on net interest margin (NIM), VNDirect forecasts a 2025 NIM of 4.0%, 28 basis points lower than previous estimates. This drop is due to TCB maintaining low lending rates to drive credit growth and retain long-term customers. Meanwhile, cost of capital is expected to remain elevated due to tightening market liquidity.

Leveraging its strength in real estate, TCB mainly targets the primary housing markets in Hanoi and Ho Chi Minh City. Its ecosystem-based financing strategy enables it to integrate banking products throughout the entire value chain, generating stable low-cost CASA (current account savings account) inflows. As a result, TCB maintained one of the highest CASA ratios in the sector, reaching nearly 38% by end-2024, ranking second in the industry.

Techcombank has also invested heavily in digital transformation and data analytics to enhance customer experience, enable cross-selling, and improve asset quality monitoring.

Focusing on high-quality retail and SME borrowers – especially affluent and middle-class clients from ecosystem partners – TCB continues to lead in asset quality, with a Q1/2025 NPL ratio ranked second lowest in the system, just behind Vietcombank (VCB).

At the latest AGM, TCB’s leadership updated shareholders on plans for an IPO of TCBS (Techcom Securities), targeting late 2025, subject to market conditions. The bank is currently in discussions with one to two strategic investors for the pre-IPO stake sale.

VNDirect expects the IPO to generate a substantial financial gain for the parent bank, either directly on the income statement or through a revaluation of TCB's investment in TCBS, thereby increasing TCB’s book value in 2025. In the long run, the IPO is also expected to strengthen TCBS’s capital base and support its independent growth trajectory.

Notably, TCBS was the most profitable securities firm in 2024, with pre-tax profit of VND 4,080 billion, far ahead of second-place SSI (VND 3,500 billion), contributing 17.4% to TCB's consolidated pre-tax profit for the year. As of Q1/2025, TCBS remains in the top 3 brokerage firms on HoSE and has expanded its corporate bond underwriting market share to 57%, up from nearly 50% at the end of 2024.

Applying a target P/B multiple of 2.0x (based on peer comparisons) to value TCBS – which currently contributes about 17% of TCB’s consolidated pre-tax profit – VNDirect assumes TCB will reduce its stake from 94.1% to 51% post-IPO, retaining control rather than diluting through new share issuance. Based on this assumption, VNDirect has raised TCB’s target price to VND 35,300/share, excluding potential upside from the IPO.