Domestic banks in Vietnam have kicked off the year on a high note, reporting solid profit figures for the first quarter. However, while year-over-year (YoY) growth remains impressive, sequential performance compared to Q4 2024 has been a mixed bag, with some banks experiencing a dip in earnings.
Sacombank Leads Q1 Gains, OCB Takes a Hit
A majority of Vietnam’s major banks have posted gains, with Sacombank at the forefront. The bank’s pre-tax profit soared by 51% YoY to $160 million, bolstered by stable asset quality and a slight recovery in its net interest margin (NIM). However, when compared to the previous quarter, profits declined by 14%.
OCB, on the other hand, was the only lender to report a loss in momentum. The bank’s Q1 profit is expected to shrink by 18% YoY, making it an outlier among its peers.
Meanwhile, VietinBank and VPBank also posted notable YoY increases at 22% and 32%, respectively. Despite this, VPBank’s profit of $220 million marked an 11% decline from Q4 2024, reflecting quarterly volatility.
Techcombank and HDBank Show Strong Sequential Growth
Techcombank is poised to report the highest sequential profit growth among all lenders, with an expected 77% jump compared to Q4 2024. The bank’s projected $332 million pre-tax profit represents a 6% YoY increase, driven by strong credit growth of 6.5% and an improving NIM.
HDBank follows closely, with an 18% sequential increase and a 19% YoY jump, reaching an estimated $192 million. Credit growth at the bank has remained steady at around 6% since the start of the year.
In contrast, other banks such as BIDV, MB, and ACB are expected to see declines in quarterly profits, despite moderate annual growth.
State Banks Maintain Stability with Moderate Gains
Vietnam’s state-owned banks, including BIDV and Vietcombank, have shown consistent but moderate growth. BIDV is expected to achieve pre-tax profits of $320-$340 million, reflecting an 8-10% YoY increase.
Vietcombank’s profits are projected to reach $440-$452 million, up 3-5% YoY and 3% quarter-over-quarter, thanks to strong credit expansion and stable asset quality.
For MB, quarterly earnings are forecasted at $260-$268 million, marking a 15% annual rise but a 17% sequential drop. Lower provisioning costs have helped sustain profitability despite challenges.
Smaller Banks Face Mixed Fortunes
ACB’s estimated Q1 profit stands at $220 million, marking a 12% YoY increase but a slight 3% dip from the previous quarter. The bank’s asset quality has remained relatively strong, with stable bad debt ratios.
TPBank expects to post $80 million in pre-tax profits, up 9% YoY, but slightly down (1%) compared to the last quarter. The bank’s credit growth has been steady at 4%, aided by cost-control measures.
VIB is expected to maintain stable profits of approximately $100 million, supported by credit growth of 3% since the beginning of the year. However, its bad debt ratio may see a marginal increase compared to last year.
Sector Outlook: Cautious Optimism Amid NIM Pressures
According to MBS Securities, banks will likely face ongoing NIM pressures due to lower lending rates aimed at stimulating credit growth. However, projections for 2025 remain optimistic:
- ACB, TPBank, Techcombank, VIB, HDBank, and VPBank are expected to exceed 18% profit growth this year.
- MB, BIDV, Sacombank, and Vietcombank will likely see single-digit profit growth.
Vietnam’s overall banking sector is projected to achieve credit growth of 17-18% for the full year. While this presents a positive outlook, risks associated with bad debt and interest rate pressures remain a concern for industry watchers.
