Net profit margin narrows, bank profits remain high

Although net interest margin (NIM) is under pressure to narrow as deposit interest rates increase and lending interest rates decrease to support businesses, the bank's profits are still positive.

Accept NIM reduction

Financial analysts forecast that credit growth in 2025 will continue to be positive thanks to strong supporting factors, including the banking industry's solutions to maintain low interest rates to stimulate credit demand and support economic recovery after the pandemic and global fluctuations.

However, this is also a challenge for banks when NIM is narrowing. Mr. Vo Hoang Hai, Deputy General Director of Nam A Bank, said that once the total credit growth is boosted, banks must also cut costs and accept a reduction in NIM to reduce lending interest rates in order to increase credit growth. According to Mr. Hai, currently, every bank has to compete to maintain and expand credit market share, so it is very difficult to lend at high interest rates.

With an economic growth target of 8% or more, the State Bank has set a credit growth target of 16% this year, meaning credit capital will increase by over VND2.5 million billion. To achieve this target, lending interest rates must remain low and decrease further to stimulate credit demand. This will impact bank profits. NIM is unlikely to increase sharply because banks continue to reduce lending rates to support customers, while deposit interest rates are unlikely to remain low due to liquidity and exchange rate pressures.

In the context of NIM inching up and credit growth possibly reaching 14-16%, banking industry profits are still forecast to increase by 10-20% in 2025.

Profits still growing well

NIM narrows, but banks' profits in the first quarter of 2025 still increase and are forecast to be positive in 2025. SHB has just announced its business results in the first quarter of 2025, with pre-tax profit reaching nearly VND 4,400 billion, equal to 30% of the profit plan for the whole year of 2025. In 2025, SHB sets a pre-tax profit target of VND 14,500 billion, a growth of 25%, total assets of VND 832,000 billion, charter capital of nearly VND 46,000 billion, along with a credit growth plan of 16% and strict control of the bad debt ratio below 2%.

Mr. Tu Tien Phat, General Director of ACB, said that in the first quarter of 2025, credit increased by more than 3%, and mobilization increased by more than 2%. In the context of increasing bad debts in the system, ACB's bad debt ratio in the first quarter of 2025 still decreased slightly, at 1.34%, helping the bank increase operational efficiency. ACB's profit in the first quarter of 2025 completed about 20% of this year's plan of VND 23,000 billion before tax.

Meanwhile, TPBank's pre-tax profit reached more than VND2,100 billion in the first quarter of 2025, equivalent to 26% of the annual plan. TPBank's total operating income in the first quarter of 2025 reached nearly VND4,500 billion. Of which, interest income still accounted for the largest proportion, reaching VND3,380 billion. By the end of the first quarter of this year, TPBank's total capital mobilization reached VND337,800 billion, up 7% over the same period. Credit growth reached 3.75%, higher than the industry average (2.5%).

SeABank announced its consolidated business results for the first quarter of 2025 with pre-tax profit reaching VND 4,350 billion.

Similarly, VIB's profit in the first quarter of 2025 will reach about VND 2,200 billion, out of the total pre-tax profit target of over VND 11,000 billion for the whole year of 2025.

Nam A Bank has just announced its business results for the first quarter of 2025 with pre-tax profit reaching VND 1,214 billion, up 21.52% over the same period last year. As of March 31, 2025, the bank's total assets reached nearly VND 263,000 billion, up more than 7% compared to the beginning of 2025. Outstanding credit reached nearly VND 178,000 billion, up 6% compared to the beginning of the year. Capital mobilization reached nearly VND 204,000 billion, up nearly 14% compared to the beginning of 2024.

VietABank has just announced its financial report for the first quarter of 2025 with pre-tax profit reaching 352.9 billion VND, an increase of 42.5% over the same period last year...

Only PGBank reported a decrease in pre-tax profit in the first quarter of 2025 (reaching VND 96 billion, down 17.3% compared to the same period in 2024).

According to Ms. Do Minh Trang, Director of Analysis (ACBS Securities Company), the average profit growth rate of the banking industry this year will reach about 14-15%.

Source: https://baodautu.vn/bien-lai-rong-thu-hep-loi-nhuan-ngan-hang-van-cao-d271853.html