VPB held an analyst meeting on May 14. Overall, the bank’s provided details on Q1 2025 results tracked in line with our expectations due to strong top-line growth and ongoing recovery at FEC. Though anticipating certain downside risks from tariff uncertainty, VPB remains committed to achieving its strong growth target in 2025 (credit growth of 25% YoY; PBT +26% YoY) given supportive policies by the Government to push domestic growth, and the ongoing recovery of real estate market.  

Key takeaways from the meeting are as follows:  

1. Macro environment: 

- Robust Q1 2025 GDP growth with well-controlled inflation, strong FDI disbursement, and a good recovery in tourism.  

- Challenges: Pressure on VND depreciation and credit growth outpacing deposit growth indicate potential upward pressure on interest rates toward the end of the year (though expecting stable interest rates in the next three months); increasing housing prices from a high base (though the Government pushing social housing projects should support real housing demand).  

- Resolution No.68-NQ/TW promoting the private sector’s growth is a strategic movement for the economy. Additionally, legalizing Decree 42 on bad debt resolution is another catalyst to support the banking sector.  

- Tariff direct impacts on VPB are currently modest (though the situation is still being closely monitored).  

2. Further details on Q1 2025 results and outlook: 

- Credit growth: Q1 2025 credit growth of 6% QoQ was driven by the corporate segment and mortgages drove retail loan growth (VPB’s real estate exposure leans toward the northern market, where recovery is stronger). VPB anticipates 6M 2025 credit growth of 15% (vs its full-year target of 25%) with a gradual increase in the contribution of retail & SME credit. April and May saw better retail credit growth.  

- Robust funding growth in Q1 2025 (customer deposits + 14% QoQ, valuable papers +18% QoQ) was primarily driven by retail customers. Key reasons include (1) more campaigns attracting deposits from elite customers, (2) the launching of a new CD product “Loc Phat Thinh Vuong” in March, and (3) FDI deposits. The launch of the "Super Sinh Loi" (auto-earning CASA product) in March added VND4.2tn, bolstering the bank's CASA volume.  

- NIM: Downward pressure in the coming quarters from higher funding costs and ongoing competitive lending rates. However, an increasing retail contribution while improving debt collection should help to mitigate the negative impact.   

- Asset quality: Bad debts increased QoQ but remained in line with the bank’s expectations due to the Tet holiday (delaying debt collection), the expiration of Circular 02 and the slow recovery of real estate. Enhanced debt collection and recovery efforts, including the application of AI and policy reforms, led to an 84% increase in bad debt recovery. There could be some fluctuation in the NPL ratio amid uncertainties but it still remains manageable given ongoing recovery of the economy (especially real estate). 

- Restructured loans under Circular 02 & 06 were VND4.4tn in Q1 2025 (potentially only the parent bank; ~1% of the consolidated loan book) with 92% of the portfolio maintaining normal payments. 

3. FE Credit: 

- Received a Moody's outlook upgrade from negative to stable in Q1 2025; established an extensive partnership with MWG.  

- Q1 2025 disbursements grew by 17% YoY, with expectations for continued positive momentum in the remaining quarters. 

- Approximately 40–45% of FEC's customers are industrial workers, making it more vulnerable within the group amid tariff uncertainties; however, bad debt collection performed well, and the legalization of Decree 42 is expected to support both banks and consumer finance. 

4. GPBank (zero-dong bank restructuring plan):  

- VPBank has outlined a 10-year strategy for GPBank focused on leveraging VPB's ecosystem and talent pool to streamline operations and reduce costs. 

- Key personnel have joined GPBank’s board, and a detailed strategic roadmap to support GPBank’s operational setup and enable its organic growth is expected to be delivered in Q2–Q3 2025. 

- In Q1 2025, VPB’s credit growth prior to transferring loans to GPBank was 8.4% (vs 6% post transferring). No further sharing was given but we think it is likely that GPBank’s loan book will rely more on its organic growth in the coming quarters rather than buying debts from VPB. 

-Before the acquisition, GPBank made around VND1tn of losses per year. VPB expects GPBank to make a minimum profit of VND500bn this year. 

- Though being eligible for raising FOL up to 49%, VPB has no specific plan on utilizing this yet in the short term.