Vietnam Banking Sector Report — Q1 2025

Macro and policy: growth runs ahead, policy stays accommodative

Gross domestic product grew by an estimated 6.93% year on year in the first quarter of 2025, the highest first-quarter rate in the 2020-2025 period, according to the General Statistics Office. Growth then picked up to an estimated 7.96% in the second quarter, taking first-half growth to 7.52%, the highest for a first half in the 2011-2025 period. Financial, banking and insurance activities grew 6.83% in the first quarter, contributing 0.41 percentage points to total value-added growth, and 6.53% in the first half, contributing 0.38 percentage points. Banking was therefore growing a little more slowly than the economy as a whole, even as credit accelerated.

Exports grew strongly. Goods exports reached USD 102.84 billion in the first quarter, up 10.6%, with the United States the largest market at USD 31.4 billion. In the first half, exports rose 14.4% to USD 219.83 billion and the United States took USD 70.91 billion. The goods trade surplus narrowed to USD 7.63 billion in the first half from USD 12.15 billion a year earlier. Realised foreign direct investment was estimated at USD 11.72 billion in the first half, up 8.1%. The State Bank of Vietnam (SBV) noted in its half-year report that the global economy was slowing and was affected in many ways by US tariff policies. The government's growth target for 2025 is 8% or more. Inflation stayed contained. Average CPI rose 3.22% year on year in the first quarter, with core inflation at 3.01%. For the first half, average CPI was up 3.27% and core inflation 3.16%, while the June reading was 3.57% above a year earlier. The US dollar price index, a proxy for the dong's exchange rate, was 0.92% above its December 2024 level in March 2025 and 2.92% above it in June. This points to a gradual depreciation of the dong through the first half rather than a disorderly move. Monetary policy remained accommodative. The SBV said it continued to keep its policy rates low to steer lending rates down, and that average lending rates on new loans by commercial banks at 30 June 2025 were lower than at the end of 2024. Its refinancing rate was cut to 4.5% a year, and its rediscount rate to 3.0%, with effect from 19 June 2023. The SBV also said it managed the exchange rate flexibly to help absorb external shocks. At the end of its 2025 Article IV mission in June, IMF staff took a more cautious view, saying monetary policy had much more limited room and should be decisively focused on anchoring inflation expectations.

Macro and monetary indicators, 2025

Source: General Statistics Office of Vietnam (National Statistics Office, Ministry of Finance), Report on socio-economic situation in Quarter I in 2025, 6 April 2025; General Statistics Office of Vietnam (National Statistics Office, Ministry of Finance), Report on socio-economic situation in second quarter and six months of 2025, 5 July 2025; State Bank of Vietnam, Báo cáo tóm tắt hoạt động ngân hàng 6 tháng đầu năm và nhiệm vụ, giải pháp 6 tháng cuối năm 2025 (Summary report on banking activities in the first six months and tasks for the last six months of 2025), 21 July 2025.

System: credit accelerates, funding lags

Credit growth was slow in the first quarter and then gathered pace. By 25 March 2025, credit to the economy had grown 2.49% from the end of 2024, while capital mobilised by credit institutions was up 1.36% and total liquidity 1.99%. By 26 June credit was up 8.30%, against 4.85% at the same point of 2024. The SBV reported that total credit outstanding exceeded VND 17.2 quadrillion at 30 June 2025, up 9.9% from the end of 2024 and 19.32% year on year. It said this was the highest credit growth rate since 2023.

The SBV's full-year goal is credit growth of around 16% over 2024. When it set that expectation in January, it said each credit institution's quota would be based on its 2023 rating under Circular 52/2018/TT-NHNN. The first-half outturn of 9.9% means the system had used more than half of that headroom by June. IMF staff recommended in June that credit growth limits be replaced with an improved prudential framework. The quota system is therefore likely to weigh more heavily on bank balance sheets in the second half, and it is also the clearest candidate for reform.

Funding has not kept pace with lending. By 26 June, capital mobilised by credit institutions was up 6.11% from the end of 2024, compared with credit growth of 8.30% over the same period. The gap was 2.19 percentage points. Bank disclosures show the same pattern. Techcombank's bank-only customer credit grew 10.6% in the first half, while its customer deposits rose 4.4% to VND 589.1 trillion. At ACB, credit rose 9.1% and customer deposits 5.6%, while total funds mobilised rose 10.6% to VND 707,000 billion. VPBank's consolidated credit rose 18.6% from the start of the year. Customer deposits alone are not funding this growth: lenders are drawing on other funding sources or on their loan-to-deposit headroom.

Payments continue to move to digital channels. In the first five months of 2025, non-cash payment transactions rose 45.44% in number and 25.21% in value year on year, while ATM transactions fell 15.33% in number and 4.25% in value.

Asset quality and restructuring of weak banks

The SBV reported that the on-balance-sheet NPL ratio was 1.8% at the end of May 2025. That figure excludes five banks, among them MBV, GPBank, Vikki Bank and Saigon Commercial Bank (SCB). The exclusion matters for interpretation: the headline ratio describes the system that continues to operate normally, not the legacy problem banks. In the first five months of 2025 the system resolved VND 119.14 trillion of bad debt, up 23.2% year on year.

Bank-level data show stable but uneven asset quality. Techcombank's NPL ratio rose to 1.32% at 30 June from 1.23% at the end of the first quarter, with loan loss coverage of 106.4%. ACB's NPL ratio was 1.18% before CIC reclassification and 1.26% after it, down from 1.49% at the end of 2024. VPBank reported a standalone NPL ratio of 2.31% under Circular 31. The spread between these lenders shows that system averages mask material differences in risk appetite and customer mix.

Restructuring of the weakest banks advanced. On 17 January 2025 the SBV announced the compulsory transfer of GPBank to VPBank and of DongA Bank to HDBank, under which both become single-member limited liability banks 100% owned by the receiving bank. This followed the compulsory transfer, announced in October 2024, of CB to Vietcombank and of OceanBank to MB; OceanBank was renamed MBV in December 2024. Within three months, the SBV had completed the compulsory transfer of four commercial banks. In its half-year report it confirmed that the transfers of GPBank and DongA Bank were complete and that it had reported a restructuring plan for SCB to the competent authorities for approval. SCB's case therefore remains open.

Capital and liquidity: buffers arrive

The SBV issued Circular 14/2025/TT-NHNN on capital adequacy ratios for commercial banks and foreign bank branches on 30 June 2025, with effect from 15 September 2025. The Circular sets minimum ratios of 4.5% for CET1 capital, 6% for Tier 1 capital and 8% for total capital. It introduces a capital conservation buffer that rises in steps to 2.5% from the fourth year, and banks may distribute discretionary profit in cash only while they meet the full requirement including the buffer. It also allows the SBV Governor to set a countercyclical capital buffer of between 0% and 2.5%, and lets the SBV require higher ratios for individual banks and apply a buffer to systemically important commercial banks.

Capital requirements including the capital conservation buffer under Circular 14/2025/TT-NHNN

Source: Government of Vietnam (Government Electronic Portal, Chinhphu.vn), Tỷ lệ an toàn vốn với ngân hàng thương mại, chi nhánh ngân hàng nước ngoài (Capital adequacy ratios for commercial banks and foreign bank branches: Circular 14/2025/TT-NHNN), 18 July 2025.

When fully phased in, the requirement including the buffer is 10.5% for total capital. That is 2.5 percentage points above the 8% minimum. Banks with lower ratios or high cash payouts will face the most pressure on dividend policy. Two of the larger private banks report capital adequacy ratios above the fully phased-in 10.5%, although these ratios were calculated before Circular 14 took effect. Techcombank's capital adequacy ratio was 15.0% (Basel II) at 30 June, down from 15.35% at the end of the first quarter. VPBank reported a consolidated capital adequacy ratio of close to 14%. Techcombank's ratio fell 0.35 percentage points in a single quarter, which the bank attributed mostly to rapid credit growth in the second quarter. IMF staff listed building liquidity and capital buffers, strengthening supervision and further improving the bank resolution framework among their priorities for banking-system resilience. On liquidity, Techcombank's regulatory loan-to-deposit ratio was 82.4% at 30 June 2025, below the SBV's 85% limit. VPBank reported a loan-to-deposit ratio of 80.2%. With credit growing faster than deposits across the system, such headroom is likely to narrow if lending keeps its first-half pace.

Profitability: strong second quarter, mixed first half

Techcombank and ACB both reported stronger second quarters than first quarters. Techcombank's profit before tax was VND 15.1 trillion in the first half, down 3.2% year on year, but its second-quarter profit of VND 7.9 trillion was its highest quarterly figure and 9.2% above the first quarter. Its quarterly net interest margin rose to 3.8% in the second quarter from 3.7% in the first. Its CASA ratio was 41.1%.

ACB reported second-quarter profit before tax of VND 6,100 billion, up 33% on the previous quarter, and first-half profit of VND 10,700 billion, up 2% year on year. Its CASA ratio was 22.6%. VPBank's consolidated profit before tax rose 30% to VND 11,229 billion in the first half. Its consolidated total assets exceeded VND 1.1 quadrillion. MB reported bank profit of VND 15.4 trillion for the first half, up 16.9% and 50.8% of its annual plan, with credit up 12.5%.

Selected bank results, first half of 2025

Source: Vietnam Technological and Commercial Joint Stock Bank (Techcombank), 6M25 Techcombank (TCB - VN) results press release, 21 July 2025; Vietnam Prosperity Joint Stock Commercial Bank (VPBank), Tăng trưởng đồng bộ cả về lượng và chất, tổng tài sản VPBank vượt mốc 1,1 triệu tỷ đồng (VPBank first-half 2025 results press release), 22 July 2025; Asia Commercial Joint Stock Bank (ACB), Quý II/2025, ACB ghi nhận lợi nhuận trước thuế đạt 6.100 tỷ đồng, tăng 33% so với quý trước (ACB second-quarter 2025 results press release), 24 July 2025; Military Commercial Joint Stock Bank (MB), Hội nghị sơ kết 6 tháng đầu năm 2025 (MB first-half 2025 review conference), 4 July 2025.

The four results show no single pattern: VPBank and MB grew profits strongly, while Techcombank and ACB were broadly flat on the year but stronger in the second quarter. The second-quarter improvement came from different sources: at ACB, non-interest income rose 68% and provisioning costs fell 26%, while Techcombank's quarterly margin edged up. The figures are not fully comparable, because definitions of profit, credit and NPLs differ between banks' releases.

Regulation: collateral seizure becomes law

On 27 June 2025 the National Assembly passed the Law amending the Law on Credit Institutions, with 435 of 443 deputies present voting in favour. The law has 3 articles and takes effect on 15 October 2025. It obliges the party holding collateral for a bad debt to hand it over to the lender or debt-trading organisation, and allows the lender to seize the collateral if it is not handed over, with commune-level People's Committees and police maintaining order during seizure. It also allows the SBV to grant special loans to credit institutions, with or without collateral, at an interest rate of 0% a year in the cases set out in Article 192. The SBV said it had proposed the amendments and submitted them to the Government and the National Assembly, with the aim of continuing to codify certain provisions in law.

Taken together with the new capital rules, the amendment gives banks a stronger tool to recover bad debt and gives the SBV a zero-rate special lending tool. The SBV also expects an amended Law on Deposit Insurance to go to the National Assembly at its 10th session, in October 2025.

Risks and outlook

The first risk is the trade environment. The United States was Vietnam's largest export market in the first half, and the SBV has flagged the effects of US tariff policies on the global economy. A sharp fall in exports would feed through to borrowers in export-linked sectors and to their suppliers.

The second is funding. Credit growth of 8.30% against growth in capital mobilised of 6.11% by late June implies that banks will need to compete harder for deposits if lending continues at its first-half pace, which would put pressure on margins. Measured against the end-2024 base, the SBV's goal of around 16% leaves room for about 6.1 percentage points of further credit growth in the second half, less than the 9.9% achieved in the first.

The third is the legacy of weak banks and capital. SCB's restructuring plan was still awaiting approval at mid-year, and the reported NPL ratio of 1.8% excludes five banks. The transition to Circular 14 will require banks to plan for a 2.5% conservation buffer, and IMF staff have urged that credit growth limits be replaced by a prudential framework. On balance, Vietnam's banks are growing quickly in a supportive economy, but funding has not kept pace with lending and, at Techcombank at least, growth is drawing down capital ratios, which is where supervisory attention is likely to focus.

Primary sources: General Statistics Office of Vietnam (National Statistics Office, Ministry of Finance), Report on socio-economic situation in Quarter I in 2025, 6 April 2025; State Bank of Vietnam, Báo cáo tóm tắt hoạt động ngân hàng 6 tháng đầu năm và nhiệm vụ, giải pháp 6 tháng cuối năm 2025 (Summary report on banking activities in the first six months and tasks for the last six months of 2025), 21 July 2025; Government of Vietnam (legal documents database, vanban.chinhphu.vn), Thông tư số 14/2025/TT-NHNN của Ngân hàng Nhà nước Việt Nam: Quy định tỷ lệ an toàn vốn đối với ngân hàng thương mại, chi nhánh ngân hàng nước ngoài, 30 June 2025; State Bank of Vietnam, Tín dụng tăng 9,9% trong 6 tháng đầu năm 2025, cao nhất trong nhiều năm trở lại đây (Credit up 9.9% in the first six months of 2025), 8 July 2025; General Statistics Office of Vietnam (National Statistics Office, Ministry of Finance), Report on socio-economic situation in second quarter and six months of 2025, 5 July 2025; Government of Vietnam (Government Electronic Portal, Chinhphu.vn), Quốc hội thông qua Luật sửa đổi, bổ sung một số điều của Luật Các tổ chức tín dụng (National Assembly passes the Law amending the Law on Credit Institutions), 27 June 2025; Government of Vietnam (Government Electronic Portal, Chinhphu.vn), Tỷ lệ an toàn vốn với ngân hàng thương mại, chi nhánh ngân hàng nước ngoài (Capital adequacy ratios for commercial banks and foreign bank branches: Circular 14/2025/TT-NHNN), 18 July 2025; Government of Vietnam (Government Electronic Portal, Chinhphu.vn), Ngân hàng Nhà nước tiếp tục điều chỉnh lãi suất điều hành (SBV adjusts policy rates again), 16 June 2023; International Monetary Fund, Press Release No. 25/214: Vietnam: IMF Staff Completes 2025 Article IV Mission, 24 June 2025; State Bank of Vietnam, Tín dụng tăng cao hơn, tạo động lực cho kinh tế tăng tốc (Higher credit growth to drive faster growth), 3 January 2025; Vietnam Technological and Commercial Joint Stock Bank (Techcombank), 6M25 Techcombank (TCB - VN) results press release, 21 July 2025; Asia Commercial Joint Stock Bank (ACB), Quý II/2025, ACB ghi nhận lợi nhuận trước thuế đạt 6.100 tỷ đồng, tăng 33% so với quý trước (ACB second-quarter 2025 results press release), 24 July 2025; Vietnam Prosperity Joint Stock Commercial Bank (VPBank), Tăng trưởng đồng bộ cả về lượng và chất, tổng tài sản VPBank vượt mốc 1,1 triệu tỷ đồng (VPBank first-half 2025 results press release), 22 July 2025; Government of Vietnam (Government Electronic Portal, Chinhphu.vn), Chuyển giao bắt buộc thêm 2 ngân hàng thương mại (Compulsory transfer of two more commercial banks), 17 January 2025; Military Commercial Joint Stock Bank (MB), Hội nghị sơ kết 6 tháng đầu năm 2025 (MB first-half 2025 review conference), 4 July 2025.