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VPBank (VPB VN) – H1 2025 – Profits Surge on Credit Boom
Summary of H1 2025 results and outlook of VPBank (VPB VN)
- Net income surged 22.8% y/y, fueled by accelerated credit expansion and continued sharp enhancement in asset quality. Total credit grew 30.3% y/y, driven by strong demand across diversified corporate sectors, as well as various retail segments including consumption, mortgages, and margin lending. Net interest margin (NIM) contracted by 53bps in line with the sector trend amid a sustained low-interest rate environment; however, the decline was more moderate thanks to VPB’s strong funding position, supported by securing large offshore fundings and robust customer deposit mobilization. Net fee income (NFI) declined 26.1% y/y, primarily due to the regulatory reclassification of Letter of Credit fees as interest income, while other fee segments saw continued growth, most notably bancassurance. With the bank returning to strong business expansion post-restructuring, operating expenses rose 21.8% y/y; however, the cost-to-income ratio (CIR) remained at a market-leading 25.8%. Asset quality improvements were another key driver of profitability, with easing credit costs at both FE Credit (FEC) and the parent bank leading to a 10.5% y/y decline in provision expenses. Notably, the consolidated NPL and group 2 loan ratios dropped sharply in H1, signaling improved asset quality and limited formation of new bad debts.
- Strategic access to international capital markets enhances VPB’s capacity to sustain superior growth while positioning it favorably in terms of funding costs. Alongside strong deposit growth, offshore funding is becoming a major source fueling the bank’s expansion. Following its record-breaking USD1.0bn syndicated loan in May, VPB secured an additional USD350mn syndicated loan at the end of July, with both deals led by its strategic investor Sumitomo Mitsui Banking Corporation (SMBC). These transactions bring the bank’s YTD offshore funding mobilization to nearly USD1.6bn, strengthening its liquidity position and potentially lowering funding costs going forward should USD interest rates begin to decline.
- In the second half, we expect credit growth to continue accelerating, while NIM stabilizes at the moderate level set in Q1. Expansion will likely be driven by mortgage lending—particularly for affordable housing—alongside rising consumer finance demand amid the broader economic recovery. Lending to industrial developers and construction firms is also expected to gain momentum. However, the low-interest rate environment is likely to persist, keeping NIM at a stable but moderate level.
Interested in VPB? Click here to read more of our previous analysis on VPB’s quarterly earnings.
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