VEIL Monthly Report – January 2026

Performance

Fund Commentary

Market sentiment improved as investors looked beyond seasonal Tet distortions, refocusing on earnings momentum and Vietnam’s domestic growth outlook. In that context, we selectively rebalanced the portfolio, adding to banks, brokerages, retail, and energy, while trimming residential, conglomerates and chemicals, to concentrate risk where earnings visibility and balance sheet strength are improving fastest. The banking sector was the dominant driver, contributing +3.8% to total NAV returns. State-owned banks led performance, where VEIL holds meaningful positions, including three among our top ten holdings, with BID (+40.4%), VCB (+24.3%) and CTG (+9.9%) booking exceptional performance. This was driven by expectations of firmer credit growth, improving asset quality, and stronger capital buffers. Resolution 79 further supported sentiment by reinforcing the strategic role of leading SOEs and strengthening the investment case for state-owned banks as key policy transmission channels.

We were encouraged by new business registrations surging 126.8% YoY in January, a useful confirmation that domestic risk appetite and private-sector confidence remain firm. Within the portfolio, this supportive domestic backdrop was reflected in contributions from the retail sector, led by PNJ and MWG, which were supported by resilient consumption and improving earnings visibility. Energy also added, driven by GAS, PVS and PVD, as the oil and gas services cycle continued to recover on rising upstream activity and large domestic capex projects, such as Block B off Vietnam’s southern coast. These gains were partly offset by residential real estate, with property stocks such as VHM, KDH, and DXG seeing near-term profit-taking as interest rates moved off their trough. Nonetheless, we still believe in the long-term benefits of the national infrastructure upgrade, and continue to favour developers with proven execution and legally-ready landbanks. Furthermore, valuations of our property holdings remain cheap versus historical norms after post-rally profit-taking, which has improved forward EPS appeal against a still-strong 2026 earnings outlook.

Stock in Focus: BIDV (BID)

Founded in 1957, BID is Vietnam’s oldest and largest state-owned commercial bank by total assets of $131bn and a market cap of $14.3bn. It operates Vietnam’s most extensive network of over 1,000 branches and plays a central role in financing national infrastructure and policy-driven lending. ROE has averaged ~19% since 2022, notable given BID’s scale and policy mandates. 2025 was a record year, with PBT of $1.5bn (+18.4% YoY) and NPAT of $1.2bn (+19.2% YoY). The main driver was NIM: after compressing from 2.9% in 2022 to a trough of 2.0% in 1Q25, driven by rate cuts and funding costs, NIM rebounded to 2.5% in 4Q25 (+41bps QoQ), supported by a shift toward retail and medium/long-term lending (now 39.2% of the book vs 35.2% a year ago). Asset quality improved in 4Q25, with NPLs falling to 1.5% (from 1.9% in 3Q25) and loan loss reserve coverage rising to 100%, aided by record bad debt recovery income of $192mn. CASA rose to 21.8% (+1.7ppts YoY), reflecting digital banking gains.

BID is raising $391mn via private placement, expected to complete in 1Q26, lifting CAR by ~0.5ppts and supporting 15%–16% credit growth guidance for 2026. We forecast 2026 NPAT of $1.2bn (+6.3%), with ROE of 18.1%. The medium-term thesis is intact, supported by NIM recovery, capital strengthening for Basel III compliance, improving asset quality, and BID’s franchise as Vietnam’s largest bank.