Forecast of bank profits and bad debts in 2025

Experts say that the banking industry's pre-tax profit in the fourth quarter of this year will grow positively but slow down in 2025, while bad debt tends to decrease gradually.

Profit bank growth slows in 2025

At the industry report bank In 2025, Asia Securities Company Limited (ACBS) forecasts that banking industry profits will grow by 16.2% this year, and by 2025 the growth rate will be Slow down slightly at 14.9%.

ACBS believes that the banking industry's business results remain sustainable, showing that the industry's resilience is much better than during the previous financial crisis in 2012-2013.

However, profits continue to be differentiated among banking groups. Specifically, the State Bank are expected to see profits grow by 12% in 2025, while the dynamic private banking group will see profits grow by as much as 20%. The remaining banks, which are often smaller in size, will see profits grow by just 8%.

SSI Research's report also estimates the profits of some banks in the fourth quarter of this year. According to SSI Research, in this quarter, the banking group is estimated to have recorded a 14.5% increase in profits, with some banks seeing profits increase by hundreds of percent such as MSB, OCB, TPB... VPB alone saw a growth of more than 91%.

Meanwhile, experts from Maybank Investment Bank forecast The pace of recovery and profitability in 2025 will be uneven across banks, depending on the strength of their customer bases, asset quality and commitment to shareholder returns.

Accordingly, total profits for listed banks will grow by about 16% in 2024 and 19% in 2025. The banks with the best performance in terms of profit growth in 2025 will be VPB, TCB, HDB, MBB and STB. But the banks with better potential to achieve the target are TCB, VCB and CTG.

Bad debt will decrease

Also in the report of ACBS Securities, it is said that although it has increased slightly in 2 consecutive quarters, there are signs that bad debt seems to have peaked and may improve in 2025.

According to ACBS, the most difficult time is over and the rate of bad debt The 2025 provisioning rate of banks in the forecast analysis portfolio is expected to decrease to 1.5% from 1.6% in 2024. However, the relatively low provisioning rate in 2023-2024 will keep the provisioning pressure in 2025 high.

The buffers are no longer thick, but there is a clear differentiation between banks. Small private banks generally have lower buffers than the group of state-owned commercial banks.

Meanwhile, experts from VCBS Securities Company believe that bad debt pressure still exists for some banks with a restructured customer base that cannot be recovered in case Circular 02 is not extended after December 31, 2024, and the resulting debt risk on CIC, especially for businesses in the real estate and energy sectors with a large amount of bonds due soon. The group of banks with a high ratio of restructured debt and a low bad debt coverage ratio may face increased provisioning pressure in the fourth quarter of 2024 - 2025.

Mr. Nguyen Quoc Hung - General Secretary of the Vietnam Banking Association - said that the banking industry still faces many challenges, of which the most prominent is the issue of bad debt. Accordingly, credit institutions are facing bad debt with potential risks in the context of Resolution 42 expiring (end of 2023), and the work of recovering bad debt is facing many difficulties.

According to Mr. Hung, many customers lack cooperation, credit institutions are not allowed to seize assets, and some customers intentionally do not pay their debts... This affects the restructuring and bad debt handling process of credit institutions.

Source