VIB - NIM pressure continues; asset quality deteriorates - Earnings Flash
  • 2025-05-05T00:00:00
  • Company Research

VIB released its Q1 2025 results, reporting TOI of VND4.6tn (USD177mn; -13.5% YoY) and PBT of VND2.4tn (USD93mn; -3.2% YoY), completing 20% and 24% of our respective full-year forecasts. On a QoQ basis, Q1 2025 TOI decreased 12.8% while PBT was relatively flat due to VIB using its provision buffer to partly mitigate its provision expenses pressure. However, the Q1 2025 LLR ratio dropped to its lowest level in the past five years, standing at 31% (-19.2 ppts QoQ). We foresee potential downside risks to our 2025 earnings forecasts, pending a more comprehensive review. 

  • Q1 2025 credit growth reached 3.1%, slightly behind the system-wide growth of 3.9%. This could be driven by the corporate segment while the retail segment recorded only 1% growth in 3M 2025. Among the corporate segment, loans to financial services jumped by 27.9% YTD. 
  • Q1 2025 customer deposit growth was 2.3%, while total funding growth (including customer deposits and valuable papers) was 3.0%, which is in-line with credit growth. Additionally, VIB’s Q1 2025 CASA ratio slightly increased by 1 ppts QoQ to 15.1% which was opposite to the trend that we observed at ACB and STB. 
  • Q1 2025 NIM decreased 125 bps YoY to 3.05% vs our full-year forecast of 3.63%. On a QoQ basis, we see that VIB’s NIM declined 12 bps QoQ. We believe that due to high price competition, smaller to medium-sized banks like VIB face more NIM pressure, as they lack the advantages of low-cost funding.
  • Q1 2025 NOII was VND864bn (-10.1% YoY) due to weaker bancassurance services and FX incomes outweighing stronger recovery income. 
  • Asset quality deteriorated in Q1 2025 with the NPL ratio increasing 28 bps QoQ and 19 bps YoY to 3.79%. However, Q1 2025 provision expenses decreased 55.4% YoY, leading to the LLR ratio decreasing 19.0 ppts YoY to 31% - the lowest level compared to other banks in our coverage that have released Q1 2025 results. 
  • Q1 2025 CIR was 38.2%, slightly increasing 3.0 ppts YoY due to the weaker TOI YoY.

VIB’s consolidated Q1 2025 results 

VND bn 

 Q1 2024

Q1 2025

 YoY 

NII

                  4,358 

                      3,737 

-14.2%

Non-interest income

                       961 

                         864 

-10.1%

TOI

                   5,319 

                      4,601 

-13.5%

OPEX

                 (1,871)

                   (1,759)

-6.0%

PPOP

                  3,447 

                     2,842 

-17.6%

Provision expenses

                   (945)

                       (421)

-55.4%

PBT

                  2,502 

                      2,421 

-3.2%

Net profit

                   2,001 

                      1,936 

-3.2%

 

 

 

 

Loan growth **

0.5%

3.1%

2.6 ppts

Deposit growth

-1.0%

2.3%

3.3 ppts

 

 

 

 

NIM ***

4.29%

3.05%

-125 bps

Interest-earning asset yield

7.87%

6.84%

-102 bps

Cost of funds

4.02%

4.22%

21 bps

CASA ratio*

13.4%

15.1%

1.8 ppts

CASA ratio plus term deposits in FX

17.0%

20.3%

3.3 ppts

CIR

35.2%

38.2%

3.0 ppts

 

 

 

 

NPLs / Gross loans

3.60%

3.79%

19 bps

Group 2 loans / Gross loans

5.65%

3.31%

-234 bps

Accrued interest / IEAs

0.73%

0.60%

-13 bps

Source: VIB, Vietcap — *CASA volume includes demand deposits and margin deposits; ** Q1 2024 and Q1 2025 loan and deposit growth is QoQ growth; *** NIM is the annualized NII of Q1 results.

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