CREDIT GROWTH AND PROFITABILITY IMPROVE AT MANY BANKS

The first half of 2025 witnessed a remarkable transformation in the banking sector, with both credit growth and profitability showing positive momentum.

MB’s pre-tax profit in Q2 2025 is estimated at VND15.75 trillion

Economic bright spot

The common highlight in banks’ reports in the first half of 2025 showed a more stable and sustainable growth cycle in the banking industry. Credit expansion, improved profitability, and tighter control of asset quality are collectively laying a solid foundation for a strong performance in the second half of the year.

According to the State Bank of Vietnam (SBV), as of June 30, 2025, total outstanding credit of the banking system exceeded VND17.2 quadrillion, up 9.9% compared to the end of 2024 and 19.32% year on year. Credit continued to be channeled into production and business sectors, priority areas, and key growth drivers, as directed by the Government, including major and feasible projects. The credit structure aligned with the economic structure and met the credit demand of both individuals and businesses.

Special credit programs continued to be effectively implemented, including VND145 trillion for social housing, worker housing, and renovation of old apartment buildings; VND500 trillion for infrastructure investment and digital technology; and VND100 trillion for agriculture, forestry, and fisheries.

The credit structure shifted positively. Credit to agriculture and rural development expanded by 5.31%, accounting for 23.16% of total outstanding loans. Credit to small and medium-sized enterprises (SMEs) rose by 5.71%, making up 17.51%. Export credit increased by 2.91%, while credit for supporting industries surged 15.69%. Notably, credit for high-tech enterprises grew by 17.59%, reflecting a sound orientation in economic restructuring.

Major state-owned banks such as the Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank), the Vietnam Bank for Agriculture and Rural Development (Agribank), and the Vietnam Joint Stock Commercial Bank for Industry and Trade (VietinBank) all reported strong credit growth and solid profits. Vietcombank, as the leading bank by scale and performance, reported impressive results. According to Mr. Nguyen Thanh Tung, Chairman of the Board of Directors, as of June 30, the bank's total assets exceeded VND2.1 quadrillion, with credit growing 11.1% from the end of 2024. The non-performing loan (NPL) ratio remained below 1%, the lowest in the sector. The loan loss provision ratio reached a record 219%, the highest in the industry.

VietinBank's outstanding loans also grew by approximately 10% compared to the end of 2024 while deposits climbed over 9%, indicating the economy's improving capacity to absorb capital.

At Agribank, business performance reached its highest level in the past four years since the lender started its restructuring plan tied to bad debt resolution in the 2021-2025 period. Total mobilized capital exceeded VND2.1 quadrillion, up 6.4%, with household deposits playing a key role. Outstanding loans surpassed VND1.85 quadrillion, up 7.6%, including over VND1.13 quadrillion in agricultural and rural credit.

Privately held joint stock banks also boasted remarkable results. Military Commercial Joint Stock Bank (MB) saw 12.5% credit growth in just six months, focusing on priority sectors such as manufacturing, healthcare, and education. MB actively reduced lending rates to support customers. Its NPL ratio was controlled at 1.27%, with full provisioning. Asia Commercial Joint Stock Bank (ACB) reported nearly 19% credit growth, the highest among joint stock banks, concentrating on SMEs, technology, exports, and infrastructure investment. Its NPL ratio remained very low, at just 1.18%. Nam A Commercial Joint Stock Bank (Nam A Bank) posted a pre-tax profit of over VND2.5 trillion in the first half of 2025, up 14% year on year. Its total assets reached nearly VND315 trillion, up over 30% from the beginning of the year. Its outstanding credit amounted to nearly VND193 trillion, up nearly 15%, while its mobilized capital from households and businesses hit nearly VND211 trillion, up over 22%. The NPL ratio was kept under control at 2.63%.

Focus on credit quality

According to SBV Deputy Governor Pham Thanh Ha, credit quality remains a top priority. Credit allocation must align with strategic orientations and directions from the Government, the Prime Minister and the SBV. As credit demand typically rises in the second half of the year, banks must closely manage liquidity to ensure payment capability under all circumstances.

To achieve the 2025 credit growth target of 16% or higher, according to Mr. Pham Chi Quang, Director of the Monetary Policy Department, the SBV has thoroughly analyzed policy response factors and forecasts inflation to remain within 4.5-5% this year. Hence, there is still room to boost credit growth. However, the SBV noted that inflation risks should not be underestimated, and it will continue to monitor price movements closely to make timely policy adjustments.

“If inflation remains under control, credit growth can be expanded healthily, and credit quality and NPLs are effectively managed, the SBV will consider raising credit growth room in 2025 to support economic growth,” he said.

Going forward, SBV Governor Nguyen Thi Hong emphasized that the SBV will continue to manage credit in accordance with macroeconomic trends, inflation, and the economy’s capital absorption capacity. Nonetheless, credit institutions must conduct thorough assessment and analysis to ensure that credit growth is accurate, substantive, and truly contributory to economic development without putting pressure on inflation. System safety must also be guaranteed.

She also asked credit institutions to aggressively implement and strive to fulfill the objectives of the Project “Restructuring Credit Institutions in conjunction with Bad Debt Resolution for the 2021-2025 period”. This includes executing approved restructuring and resolution plans for weak institutions under special supervision, particularly mandatory transfer schemes; accelerating bad debt settlement; enhancing credit quality; and minimizing the emergence of new bad debts.

Governor Hong also called on credit institutions to continue applying comprehensive solutions to promote safe, efficient credit growth, channeling credit into production, priority areas, traditional economic growth drivers, and emerging growth engines. Internal control must be strengthened to ensure operational safety. Additionally, credit institutions should further enhance digital transformation, promote cashless payments, and ensure security, safety, and confidentiality in banking activities. Key information systems must be closely monitored to promptly detect, prevent, and address potential issues and risks, thereby protecting the legitimate rights and interests of customers. Notably, the SBV and banks will continue to collaborate to foster digital literacy for the public in the banking sector.

Source: VCCI