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MSB – Shrinking non-interest income and deteriorating asset quality

• Parent bank’s PBT in Q2/2025 reached VND 1.5 trillion, down sharply by 31% YoY, mainly due to (1) a significant drop in income from the recovery of written-off bad debts (-89% YoY) and (2) a 17% YoY increase in operating expenses. Meanwhile, TNEX recorded a PBT of about VND 41 billion, showing robust growth YoY (in the whole year 2024, TNEX’s PBT was only VND 5 billion). Consolidated PBT in 1H2025 reached nearly VND 3.2 trillion, down 14% YoY, completing only 40% of the full-year target (VND 8 trillion).
• MSB’s Q2 and 1H2025 business results were generally less favorable YoY, mainly due to (1) a continued decline in NIM driven by lending competition pressure, although partially supported by interest income reversals from the recovery of on-balance-sheet bad debts, (2) deterioration in asset quality, mainly from an increase in NPLs in the retail segment, and (3) a contraction in non-interest income (excluding fee income).
• For the profit outlook in 2H2025, we believe that the plan to recover a large amount of off-balance-sheet NPLs will help support the expansion of TOI and enable the achievement of the full-year profit target. In addition, provisioning expenses will likely be increased given the persisting risk of rising NPLs, particularly in the retail segment.