- 2025-04-21T00:00:00
- Company Research
TCB released its Q1 2025 results with TOI of VND11.6tn (USD449mn; -5.3% YoY) and PBT of VND7.2tn (USD280mn; -7.2% YoY), fulfilling 21% and 22% of our respective FY2025 forecasts. Q1 2025 PBT result completes 23% of the bank's full-year guidance at VND31.5tn (USD1.2bn; +14.4% YoY). Overall, TCB’s Q1 2025 earnings were somewhat below our expectations, mostly due to lower-than-expected NIM. We see slight downside to our current forecasts, pending a more extensive review. Aside from NIM, most metrics look decent, and we believe Q1 results were a solid start to the year for TCB amid ongoing uncertainties related to potential tariffs.
Q1 2025 credit growth reached 4.1%, which was better than system-wide credit growth of 3.9%. Q1 2025 growth was mainly fueled by solid loan growth of 5.1% while the corporate bond balance dropped 7.4% QoQ.
Q1 2025 credit growth was driven by both the corporate segment (+4.3% QoQ) and the retail segment (+3.8% QoQ). For the corporate segment, the real estate (RE) sector was the key contributor to loan growth in Q1 2025 with loans to RE developers up 14.8% QoQ to VND215tn. According to TCB, strong growth in this sector was driven by (1) continued market recovery, especially in the HCMC area, and (2) increased disbursement to the Industrial Parks sector. Meanwhile, for the retail segment, the key driver was margin loans (+17.6% QoQ).
Q1 2025 customer deposit growth was (0.3%), trailing credit growth. However, the bank's regulated LDR at 80.1% remained below the cap of 85%. TCB’s CASA ratio continued to be among the highest in the sector at 35.1% although it was down 2.3 ppts QoQ and 5.4 ppts YoY. When including auto-earning balance, the CASA ratio was 39.4% in Q1 2025.
Q1 2025 NIM decreased 79 bps YoY to 3.57% vs our full-year forecast of 4.21%. On a QoQ basis, we see a continuing contraction in NIM to 3.57% (-27 bps QoQ), which was mainly driven by a decline in interest-earning asset yield (-31 bps QoQ) partially offset by a slight improvement in COF (-2 bps QoQ). We attribute this mostly to intense price competition between banks, especially in the mortgages space.
Asset quality remained well under control with an NPL ratio of 1.23% (+6 bps YoY, +6 bps QoQ) in Q1 2025 vs our year-end 2025 forecast of 1.12%. The group 2 loan ratio was 0.82% (-31 bps YoY, +9 bps QoQ) in Q1 2025. TCB wrote off VND526bn in Q1 2025 - equivalent to a write-off rate over gross loans of 0.08%.
Q1 2025 annualized credit cost was 0.66% vs 0.87% in Q1 2024. In addition, TCB’s Q1 2025 LLR remained strong at 112% vs 114% in the previous quarter.
Q1 2025 NOII was VND3.3tn (-12.1% YoY), completing 26% of our full-year forecast.
Q1 2025 CIR increased 1.8 ppts YoY to 28.3% vs our full-year forecast of 32.2% due to a 1.1% YoY increase in OPEX and a 5.3% YoY decline in TOI.
TCB’s consolidated Q1 2025 results
VND bn | Q1 2024 | Q1 2025 | YoY |
NII | 8,500 | 8,305 | -2.3% |
Non-interest income | 3,762 | 3,306 | -12.1% |
TOI | 12,262 | 11,611 | -5.3% |
OPEX | (3,249) | (3,285) | 1.1% |
PPOP | 9,013 | 8,326 | -7.6% |
Provision expenses | (1,211) | (1,090) | -10.0% |
PBT | 7,802 | 7,236 | -7.2% |
NPAT-MI | 6,221 | 5,948 | -4.4% |
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Credit growth** | 7.1% | 4.1% | -3.0 ppts |
Deposit growth** | 0.7% | -0.3% | -1.1 ppts |
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NIM | 4.35% | 3.57% | -79 bps |
Interest-earning asset yield | 7.43% | 6.42% | -101 bps |
Cost of funds | 3.39% | 3.28% | -11 bps |
CASA ratio* | 40.5% | 35.1% | -5.4 ppts |
CASA ratio plus term deposits in FX | 41.3% | 35.8% | -5.5 ppts |
CIR | 26.5% | 28.3% | 1.8 ppts |
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NPLs / Gross loans | 1.17% | 1.23% | 6 bps |
Group 2 loans / Gross loans | 1.13% | 0.82% | -31 bps |
Accrued interest / IEAs | 1.45% | 0.99% | -46 bps |
Source: TCB, Vietcap — *CASA volume includes demand deposits and margin deposits; ** Q1 2025 credit and deposit growth is QoQ growth.
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