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OCB – PBT Q3/2025 posted solid growth driven by expanding non-interest income and strengthened bad debt recovery

• PBT for Q3/2025 reached over VND 1.5 trillion, demonstrating robust growth of 54% QoQ and 249% YoY, driven by the following factors: (1) quarterly NIM improving to 3.2% (+17bps QoQ, -22bps YoY); (2) a solid expansion in non-interest income (+10% QoQ, +123% YoY) driven by bancassurance and corporate advisory activities; and (3) a reduction in provision expenses (-49% QoQ, -65% YoY). Compared to our prior forecasts, OCB's Q3/2025 business results exhibited several positive aspects, notably the expansion of non-interest income and accelerated recovery of non-performing loans (NPLs), leading to PBT exceeding our forecast (near VND 1 trillion) by 58%. Cumulative PBT for the nine-month period recorded over VND 3.4 trillion (+34% YoY), achieving 65% of the full-year target (over VND 5.2 trillion).
• We anticipate that OCB's 2025 credit growth will be constrained by its credit quota (OCB is currently awaiting approval for a supplementary credit limit, with the initial limit being 13-14%). However, the bank's NIM in Q4/2025 is expected to continue improving due to (1) the shift in loan-tenor structure toward medium- and long-term loans (from real estate business and construction sectors); (2) strengthened bad debt recovery activities; and (3) a slower increase in funding costs, as the bank is nearly sufficiently funded and maintains CASA ratio.
• The nine-month cumulative Net interest income/ Total operating income/ Provision expenses/ PBT have respectively achieved 72%/ 70%/ 57%/ 76% of our previous full-year forecast. We will revise our forecasts to reflect the updated credit growth outlook and provide detailed updates on forecasts and valuation in upcoming reports.