Vietnam’s leading lenders delivered a stellar third quarter, with aggregate profits driven by a national credit boom, soaring service revenue, and a strategic reduction in funding costs.
HANOI – Vietnam’s banking sector has signaled strong economic momentum, with a wave of major commercial banks reporting significant profit increases for the third quarter. The period was marked by a dramatic leadership change at the top, as VPBank (VPB) delivered a record quarterly profit, surpassing its rival, Techcombank.
VPBank reported a third-quarter pre-tax profit of 9.166 trillion VND (approx. $382 million), representing a massive 77% jump year-on-year and setting a 15-quarter high. This performance allowed VPBank to eclipse Techcombank, which had held the profit leadership position in the same period last year.
This sector-wide surge in profitability is rooted in three key factors:
- Accelerated Credit Growth: Strong demand for loans across the economy.
- Service Revenue Breakthroughs: Rapid expansion of non-interest income streams.
- Lower Cost of Funds (CASA): An increasing ratio of Current Account/Savings Account deposits is reducing banks’ overall cost of capital.
The New Leaders and Key Drivers
VPBank’s exceptional quarter contributed to a nine-month cumulative profit of over 20.396 trillion VND, a 47% increase compared to the previous year. By the end of Q3, the bank’s total assets hit 1.18 quadrillion VND, surpassing its annual target. Loan balances grew nearly 30%, reflecting the nation’s ongoing credit expansion.
Techcombank (TCB) also posted robust results, with Q3 pre-tax profit exceeding 8.2 trillion VND, up 14% year-on-year. Its nine-month cumulative profit stands at 23.834 trillion VND.
Asia Commercial Bank (ACB) saw an 11% rise in Q3 profit to 5.4 trillion VND. Key growth drivers for ACB were its foreign exchange business, which nearly tripled, and a 90%+ surge in securities trading profits.
Overall, 13 commercial banks have released their Q3 financials, with the vast majority reporting double-digit profit growth. LPBank, for example, saw a 19% increase in pre-tax profit for the quarter.
The National Credit Boom
These stellar results are directly supported by official State Bank of Vietnam (SBV) data, which shows that credit outstanding across the entire banking system expanded by 13.37% since the start of the year. Compared to the same period last year, credit is up an astonishing 19.6%.
Experts estimate that total credit growth for the year could hit 20%, marking the highest level in several years and showcasing the Vietnamese economy’s insatiable demand for capital.
Despite the high loan growth, the SBV remains focused on market stability and has directed lenders to continue efforts to reduce mobilization interest rates. Analysts believe deposit interest rates will remain stable—potentially for the next year—likely settling between 5.2-5.3% per annum, providing a stable funding environment for banks as the credit boom continues.
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Source: Vietnam Insider