Banks Industry: Neutral outlook on the back of tightening monetary policy – Initiation

• We expect Vietnam banks to achieve 14-15% credit growth in 2019-20F.
• We see modest net interest margin (NIM) expansion in 2019F due to rising funding costs while non-interest income (non-II) should remain robust.
• We are Neutral on the sector but recommend Add on a few banks that are better positioned to capture opportunities in retail lending and non-II activities

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