Banks Win Big in Q1/2025: What's Driving the Momentum?

Credit "explosion"

At the conference "Promoting bank credit to contribute to economic growth in Region 8" held on April 3, 2025, Deputy Governor of the State Bank Pham Quang Dung said that credit in the entire system by March 25 had increased by about 2.5% compared to the end of 2024 (while in the same period in 2024 it only grew by about 0.26%). This increase was 10 times higher than the same period, at the same time, the capital utilization ratio of banks currently reached 103%, showing that the application organizations have used the maximum capital source to provide credit to the economy.

This is one of the factors that helps banks' profits in the first quarter of 2025 to grow well. Along with that, banks are promoting cost optimization and service enhancement.

Although there has been no official announcement from the banks, research reports from securities companies show that the expected profit picture of commercial banks in the first quarter of 2025 is quite positive.

On April 4, 2025, National Citizen Commercial Joint Stock Bank (NCB) announced its business results for the first quarter of 2025, recording positive profits with business targets achieving positive growth with pre-tax profit estimated at more than 125 billion VND. The growth targets were comprehensively positive: mobilized capital (including customer deposits and issuance of valuable papers) was estimated at more than 107,000 billion VND, up 6.8% compared to the end of 2024; customer loans were estimated at more than 78,000 billion VND, up 9.6% compared to the end of 2024, equivalent to an increase of more than 6,800 billion VND. Net interest income reached the highest level in 9 consecutive quarters, estimated at nearly 510 billion VND. Other business activities such as service activities, foreign exchange and gold trading, investment securities trading... were all profitable in the last quarter. Total assets as of March 31, 2025 reached nearly VND 131,000 billion, an increase of 10.4% compared to December 31, 2024.

NCB's net interest income reached its highest level in 9 consecutive quarters. Photo: Duy Minh

At the General Meeting of Shareholders held at the end of March 2025, NCB General Director Ta Kieu Hung previously revealed the bank's bright business results, expected to be profitable from the first quarter of 2025. "This result was achieved thanks to NCB promoting business activities according to the new Strategy in parallel with actively restructuring the bank according to the roadmap in the Restructuring Plan with a vision to 2030 approved by competent authorities" - Mr. Hung emphasized.

It is known that in 2025, NCB sets a business plan for the whole year with total assets reaching 135,500 billion VND, customer mobilization reaching 118,500 billion VND, growth of 14.6% and 23.2% respectively compared to 2024; customer loans growing 35% to more than 96,000 billion VND; profit before restructuring plan reaching 59 billion VND and customer scale increasing by 424,000 customers compared to 2024.

Research reports by securities companies recently released also give positive forecasts for credit growth in the first quarter of 2025 of many banks. For example, according to Saigon Securities Incorporation (SSI), Sacombank is estimated to achieve pre-tax profit of VND4,000 billion, up 51% over the same period last year; VPBank may achieve a profit of VND5,500 billion, up 32% over 2024; HDBank is expected to report a profit of VND4,800 billion, up 19% over the same period, thanks to credit growth of 6% and stable NIM; MSB is estimated to achieve VND1,700 billion in profit, up 11%; or Techcombank is expected to achieve VND8,300 billion in pre-tax profit; and VietinBank is also forecast to grow strongly with pre-tax profit estimated at VND8,800 billion, up 42%...

According to financial experts, many commercial banks recorded double-digit profit growth compared to the same period last year, thanks to three main factors: credit growth, improved net interest margin (NIM) and tight cost control.

Banks with strong retail foundations such as VPBank, MB, Techcombank and HDBank continued to maintain good growth momentum thanks to promoting personal and small business lending. Meanwhile, the "Big 4" group including Vietcombank, VietinBank, BIDV and Agribank maintained their position thanks to abundant deposits and the ability to optimize capital sources.

The expected profit picture of commercial banks in the first quarter of 2025 is quite positive. Photo: Duy Minh

Challenges remain

Although the first quarter profit picture is quite positive, economic experts say there are still many points to note. First of all, bad debt is still a difficult problem. Some banks are facing increasing bad debt ratios, leading to pressure to set up large provisions, reducing profits. In addition, lending interest rates, although tending to stabilize, have not really decreased deeply, putting pressure on businesses and individuals borrowing capital. This raises the question of the ability to expand credit in the coming quarters.

Another point worth noting is the increasing competitive pressure in the industry. Banks are forced to invest heavily in technology, digitalization and non-credit services to retain customers. This means that operating costs will increase, affecting profit margins in the long term.

From market developments and first quarter business results, it can be seen that the banking industry has a fairly solid foundation to enter the next phase of 2025. However, according to experts, to maintain profit growth momentum, banks need to focus on a number of important strategies.

Firstly, it is necessary to strictly control bad debt, along with improving credit quality.

Second, continuing to boost revenue from services in the context of credit profits facing pressure, it is necessary to increase revenue from insurance, payments, credit cards and other financial services.

Third, focus on technology development and digital transformation to reduce business costs and increase competitive advantage.

Sharing on this issue, Mr. Tran Minh Hoang, Director of Analysis & Research at Vietcombank Securities Company (VCBS), commented that the main factors affecting the banking industry's profits in 2025 are credit growth, asset quality, non-interest income and cost optimization. "These factors are expected to support banks to achieve positive profit growth in 2025," Mr. Hoang affirmed.

From another perspective, a representative of a joint stock commercial bank headquartered in Hoan Kiem District (Hanoi) shared: Banks are having a favorable business period with improved net profit margins and stable credit growth. However, to maintain high profits, we cannot rely on credit forever but need to boost revenue from services, especially digital banking and value-added financial products. And we are also developing in this sustainable direction.

The first quarter of 2025 ended with impressive profit figures for the banking industry, reflecting the strong recovery of the economy and the flexible adaptability of credit institutions. It is forecasted that in the coming quarters, the banking industry will continue to grow steadily, but the differentiation between banks will become increasingly clear. Banks with good strategies, effective risk management and promoting innovation will continue to break through, while banks that are lagging behind will face more difficulties in maintaining profit growth momentum.

Thuy Linh

Source: https://congthuong.vn/ngan-hang-thang-lon-quy-i2025-dong-luc-nao-dan-dat-381581.html