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Update on Q2-2025 Business Performance and Valuation of Banking Sector

• PBT in Q2-2025 of 27 listed banks reached nearly VND 89 trillion (+17% YoY), driven by credit growth, proactive bad debt recovery, and stable credit costs compared to the same period last year. For the first six months of 2025, PBT of these banks totaled VND 172 trillion, up 16% YoY, achieving 49% of the full-year 2025 PBT plan.
• Credit growth recorded a 10.0% YTD increase, marking a positive performance over the past five years and comparable to 2022 levels. This result fulfills approximately 62% of the initial credit growth target for the year. As of August 8, credit growth reached 10.2% YTD.
• Deposit growth of listed banks by the end of Q2-2025 reached 10.0%, aligning with credit growth after five quarters of lagging behind credit growth. Banks continued to promote mobilization through valuable papers channels (+25.0% YTD), increasing the proportion of valuable papers in the funding structure to 11.9% (compared to 10.3% in 2024 and 11.1% in Q1-2025), while deposit mobilization rose by 8.3% YTD.
• NIM industry-wide increased by 10 bps QoQ to 3.15%, though it remained nearly 40 bps lower than the same period last year. This development was supported by a clear improvement in the industry’s asset quality, with net formation of overdue loans (Group 2 and bad debts) significantly declining compared to previous quarters.
• Borrowers’ debt repayment capacity has shown broad-based positive improvement. The industry’s on-balance-sheet bad debt increased by only nearly VND 2 trillion compared to the previous quarter, and the industry-wide bad debt ratio decreased by 12 bps QoQ to 2.04%.
• The banking sector’s trading index surged in July and August (as of August 27) with gains of 11% and 18%, respectively, driving a YTD increase of 40%. The industry’s P/B valuation reached 1.83x, the highest in three years and above the five-year average of 1.71x, largely driven by the revaluation process of joint-stock commercial banks