Banks set to report profit surge in third quarter

Banks set to report profit surge in third quarter

The domestic banking sector is expected to report strong third quarter profits, driven by accelerating credit growth, improved margins, and easing provisions, according to forecasts by top securities firms.

In an updated sector report, MB Securities (MBS) projected that state major Vietcombank would maintain its lead in the banking sector with estimated third quarter (Q3) pre-tax profit of approximately $475 million, up 11 per cent on-year, equal to 77 per cent of its annual target.

This is underpinned by credit growth expected to hit 11 per cent by the end of the quarter, an increase of 82 basis points on-year, driven by expanded lending activity.

At VietinBank, its pre-tax profit for the same period is expected to reach around $380 million, showing a 44.8 per cent jump compared to the same period last year.

Cumulative pre-tax profit for the first nine months of 2025 is forecast to hit $1.14 billion, up 45.6 per cent on-year, fulfilling 75 per cent of the full-year plan.

Meanwhile, VIB is also expected to record robust credit growth, with an increase of over 16 per cent as of the end of September compared to the start of the year – equivalent to a 6 per cent rise in Q3.

As a result, its Q3 pre-tax profit is estimated at $104 million, up 30 per cent on-year, while nine-month cumulative profit is projected at $304 million, up 15.3 per cent on-year, meeting 68 per cent of its annual target.

For VPBank, credit growth is projected to slow in Q3 to 6 per cent, down from the previous quarter due to intensified competition from banks with slower credit expansion in Q2.

Nevertheless, the bank’s Q3 pre-tax profit is forecast at $316 million, with a nine-month cumulative figure of $764 million, completing 75 per cent of the plan for the year.

Vietcombank Securities projected that 10 banks would post double-digit profit growth in Q3/2025, driven by accelerating credit growth, improved net interest margins, and reduced provisioning pressure.

Among the top performers are VPBank, MSB, Sacombank, MB, and HDBank, followed by VietinBank, TPBank, BIDV, Techcombank, and ACB, with the primary growth driver being lending activities.

Lai Tien Quan, deputy CEO of BIDV, revealed that the bank’s total outstanding credit in the first nine months of 2025 reached nearly $88 billion, up approximately 9 per cent. BIDV is also exploring activities to support clients affected by natural disasters.

“The government’s current policies and mechanisms are well-aligned with the needs and expectations of businesses. Along with widespread societal engagement, a strong sense of optimism is emerging. This momentum is a key driver of BIDV’s credit growth,” Quan noted.

According to updated data from the State Bank of Vietnam (SBV), as of September 29, total credit outstanding across the banking system had reached around $708 billion, up 13.3 per cent from the end of 2024.

MBS reported that credit growth among listed banks under its observation is expected to reach about 14.8 per cent by the end of Q3, equivalent to a 4.6 per cent increase in the quarter alone. A persistently low interest rate environment remains the key catalyst for this expansion.

MBS also expects retail lending to catch up with corporate lending growth in the second half of 2025, thanks to a rebound in home and consumer loans.

Banks that saw strong credit growth in the first half of the year – such as VPBank, HDBank, LPBank, and Techcombank- are likely to maintain this momentum in Q3.

On the profitability front, Tran Thi Khanh Hien, head of Research at MBS, noted that profit figures of listed banks under MBS observation are projected to grow 15.6 per cent on-year for the first nine months of 2025.

Industry-wide asset quality is expected to improve slightly by the end of Q3 compared to the previous quarter, with non-performing loans (NPL) forecast to decline below 2 per cent and the NPL coverage ratio remaining around 80 per cent.

“State-owned banks are likely to benefit more than private banks from the strong push in public investment during the remainder of the year, coupled with their superior asset quality,” Hien added.

From a policy standpoint, Pham Thanh Ha, Deputy Governor of the SBV, stated that the central bank would continue to implement proactive, timely, and effective monetary policy. It will also coordinate closely with fiscal and other macroeconomic policies to achieve comprehensive objectives of inflation control, macroeconomic stability, and growth support in line with the development orientation set by the Party, the National Assembly, and the government.

“The SBV will focus on key measures to flexibly and synchronously manage monetary policy tools and solutions with appropriate timing and dosage. This includes balancing exchange rates and interest rates to facilitate production and business activities, thereby encouraging growth while maintaining macroeconomic stability and controlling inflation,” Ha said.

He added that the central bank would continue urging credit institutions to reduce operating costs and accelerate digital transformation to lower lending interest rates, thereby enhancing credit accessibility for businesses and individuals.

VIR