Reasons why ACB doubled its risk provision.

(Dan Tri Newspaper) - In 2025, Asia Commercial Bank (ACB) recorded total assets exceeding 1 trillion VND, but the cost of loan loss provisions more than doubled compared to 2024, causing pre-tax profit to be eroded, leaving only about 19,500 billion VND for the whole year.

Trillion-dollar scale and the pressure of risk management.

By the end of 2025,ACB 's total assets exceeded VND 1,025 trillion, an increase of nearly 19% compared to the end of 2024 and doubling in 5 years, marking a significant milestone in the scale of a major bank in the Vietnamese financial system.

Accordingly, ACB is one of the few private commercial banks whose assets have exceeded this mark, a testament to its ability to attract capital and expand operations on a large scale.

According to the bank's representative, joining the group of banks with total assets exceeding 1 trillion VND places ACB on a different level in terms of governance requirements, as a larger scale means a longer risk cycle, greater credit delays, and a higher requirement for safety buffers.

At the investor meeting on January 28th, ACB's leadership frankly acknowledged this. Responding to a question about the reason for the sharp increase in provision costs, a bank representative stated: “In 2025, ACB will set aside approximately VND 3,300 billion in provisions, mainly related to the implementation of Decree 86. After the regulations were clarified by the State Bank of Vietnam, we chose to make full provisions to strengthen our risk buffer, instead of postponing it to later years.”

Provisions increased sharply, but asset quality improved.

However, despite increased provisioning costs, ACB's non-performing loan (NPL) ratio decreased to 0.97%, the lowest level since 2023 and among the lowest in the industry. Simultaneously, the loan loss coverage ratio (LLR) increased sharply to 114%, from approximately 78% at the end of 2024.

In their response to investors, the bank's management emphasized that reducing bad debt is not a short-term solution.

"ACB's goal is not to keep bad debt at an absolute number at all costs, but to control bad debt at a low level, consistent with the credit cycle and the bank's cautious risk appetite," this person shared.

Defense or acceleration?

In 2025, ACB's net profit from business operations before provisions is still expected to reach approximately VND 22,900 billion, an increase compared to the previous year, demonstrating that its profitability from core operations remains stable.

ACB's leadership also acknowledged the short-term impact of the significant provisioning on ROE, but viewed it as a necessary step: "The substantial increase in provisions in 2025 is a step to strengthen the risk buffer. Once the buffer is sufficiently thick, the bank will have room to support profitability in 2026 if debt recovery is implemented effectively."

Source: https://dantri.com.vn/kinh-doanh/ly-do-acb-tang-gap-doi-trich-lap-du-phong-rui-ro-20260130154534347.htm