Bad debt cools down but risks still "hide" in energy and home loans

As the supporting industry of the economy , banking in 2025 will strongly promote this role in the context of many challenges and fluctuations, through regulating capital sources for consumption and business.

In the stock market, the banking group was also dubbed as “the awakening king stock” for a year. With the driving force from the story of capital increase, increased non-interest income, strong handling of bad debt in parallel with improving asset quality, large-scale dividend distribution… banking stocks last year witnessed excitement, many codes increased by many times, and liquidity was abundant.

The overall picture is positive.

In a newly published analysis report, VIS Rating assessed that the credit capacity of the Vietnamese banking industry is recovering slightly as it enters the last quarter of 2025, thanks to three factors: improved asset quality, stable profits and a more favorable policy environment.

Data for the first nine months of the year also clearly shows that the problem debt ratio remained at 2.3%, while the rate of new bad debt formation decreased by 30 basis points compared to the previous quarter. According to VIS Rating, this downward trend comes from better debt repayment capacity of individual customers and partial recovery in some business segments.

Among them, the large banking group continues to play a pivotal role. BIDV, VietinBank,ACB and Techcombank recorded a reduction of about 20 basis points in the bad debt ratio, thanks to strong debt collection and maintaining a prudent credit portfolio. At ACB, the quality of individual housing loans improved significantly - a signal that the resilience of the retail segment remains stable.

The silent pressures

However, many big names still face bad debt risks, which is a common challenge for the industry according to VIS Rating: Credit risks tend to be "concentrated at banks with volatile loan structures".

VIS Rating said that the pressure of overdue debt is concentrated on banks with more sensitive loan structures. In particular, Military Bank (MB) is being affected by the group of renewable energy enterprises; while Sacombank (stock code: STB) is being affected by small and medium-sized enterprises specializing in import-export, aviation enterprises, etc.

At Tien Phong Bank (stock code: TPB) and HDBank (stock code: HDB), these two banks recorded an increase in overdue debt in the home loan group.

In general forecast for the last quarter of the year, VIS Rating still assesses that the bad debt ratio of the whole industry can decrease by another 10-20 basis points, thanks to the accelerated debt write-off progress and the effectiveness of the amended Law on Credit Institutions, which is expected to improve transparency and debt collection speed. This is an important support for the industry's credit recovery momentum in the remaining period of the year.

Nợ xấu hạ nhiệt nhưng rủi ro vẫn ẩn mình ở năng lượng và vay mua nhà - 1 — Pressures on banks' customer segments (Photo: Screenshot from VIS Rating report).

Clear differentiation

In terms of profitability, there is also clear stratification as the large banking group maintains its superiority thanks to its diversified income structure and better risk absorption capacity.

Large banks such as VPBank (stock code: VPB), BIDV, VietinBank and Techcombank all recorded significant growth in non-interest income, helping to balance the pressure on capital costs. VIS Rating assessed that these banks are "on track to complete the annual profit plan", thanks to the steady increase in long-term credit, reduced credit costs and strengthened risk provisions.

In the remaining group, NIM at ACB and VIB narrowed due to increased lending to large enterprises - a segment with lower interest margins than retail. TPBank and Eximbank (stock code: EIB) suffered from increased mobilization costs as CASA fell across the board and competition for deposits became fiercer. This limited the ability to improve NIM, although credit demand remained.

Liquidity is also the variable that shows the strongest level of stratification among banking groups in the first 9 months of the year. CASA of the whole industry decreased to 19%, 1 percentage point lower than the previous quarter, as depositors switched to longer terms to enjoy higher interest rates. This trend caused a significant increase in capital costs, especially at small banks such as ABBank, BacABank, KienlongBank, which depend heavily on cheap capital sources.

Overall, the first nine months data reflect a generally stable state of the industry, but with deep stratification between two groups. The large group consolidated its position thanks to improved asset quality, stable profits and increased provisions; while the small group suffered from prolonged liquidity pressure due to its dependence on short-term capital.

According to VIS Rating, the whole industry needs to maintain support policies to reduce local risks and ensure system stability in the final stage of the year.

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