- 2024 system-wide credit growth reached 15.1%, exceeding our expectations, driven primarily by the corporate sector. Most banks under our coverage (10/12) reported 2024 credit growth outpacing the system-wide level. With the new GDP growth and credit growth targets of 8% and 16%, respectively, we see potential upside to our current 2025F credit growth forecast (14%), leaning toward banks having advantages in corporate lending and funding mobilization (SOE banks, VPB, MBB, and TCB).  System-wide deposit growth in 10M 2024 at 6.9% remained weak, implying a potential full-year lag vs credit growth. 

- Q4 2024 saw continued NIM contraction. Despite prompting downside risks to our 2025 NIM forecast, we expect higher credit growth to offset lower margins. Q4 2024 NOII beat our forecast with some banks recording a surge in gains from investment activities, stronger-than-expected bad debt recovery income, and gains from FX trading.

- Q4 2024 bad debt metrics decreased QoQ with improvement in the NPL ratio and Group 2 loans (except for ACB and HDB). Meanwhile, on QoQ basis, credit costs also eased substantially, and provisioning buffers were strengthened.

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