Will credit growth reach 17–18% by the end of 2025?

Will credit growth reach 17–18% by the end of 2025?

As of June 30, 2025, system-wide credit growth stood at 9.90% year-to-date (YTD), significantly exceeding the 6.1% recorded during the same period in 2024. MBS analysts note that this strong growth was mainly driven by corporate lending, thanks to persistently low lending rates. In contrast, retail lending showed slower growth due to weak demand, reflecting a cautious recovery in home and consumer loan markets.

To support credit expansion, the Prime Minister has directed the SBV to urge credit institutions to reduce costs, simplify administrative procedures, and accelerate digital transformation in order to lower lending rates and support production and business activities.

MBS also reported that as of Q1/2025, listed banks recorded an average credit growth of 3.8% YTD, with privately owned commercial banks (JSCBs) growing faster than state-owned commercial banks (SOCBs). However, JSCBs experienced a steeper decline in net interest margin (NIM) due to more aggressive lending rate cuts. SOCBs, on the other hand, maintained stable, low interest rates since monetary policy easing began in Q3/2023.

Up to now, three banks have released their H1/2025 financial reports. Nam A Bank posted a pre-tax profit exceeding VND 2,500 billion, a 14% increase year-over-year. Its total assets reached nearly VND 315 trillion by the end of June, up more than 30% since the start of the year. Outstanding credit grew 14.7% to nearly VND 193 trillion, and deposits from institutions and individuals rose sharply by over 22% to nearly VND 211 trillion.

TPBank estimated its pre-tax profit at over VND 4,100 billion, up 12% compared to the same period last year. Credit growth stood at nearly 11.7%, driven mainly by retail lending, controlled real estate loans, and consumer finance—areas known for high net interest margins.

Meanwhile, Kienlongbank recorded a consolidated pre-tax profit of VND 565 billion in Q2, representing a 67.2% increase year-over-year. Cumulatively, the bank achieved VND 921 billion in pre-tax profit for the first half of 2025, reaching nearly 67% of its annual business plan of VND 1,379 billion. Total assets reached VND 97.63 trillion, an increase of 5.9% YTD, while customer loans rose 13.2% to over VND 69.5 trillion. Non-performing loans stood at VND 1.366 trillion, up 10.1%, though the NPL ratio declined from 2.02% at the start of the year to 1.96%.

Although full H1/2025 results have not yet been released, several major banks—such as Vietcombank, VietinBank, and Agribank—have hinted at robust performance. At their mid-year review conferences, these banks revealed expected credit growth of over 11%, more than 10%, and 7.6%, respectively.

MBS forecasts that lending activity will remain strong in the second half of 2025, driven by several key factors. First, public investment disbursement is expected to accelerate, as disbursement by the end of June reached VND 268 trillion—up 42.3% year-over-year but accounting for just 29.6% of the full-year plan. Faster disbursement in the remainder of the year is seen as essential to achieving the GDP growth target of 8%.

Second, Resolution 68 aims to elevate the role of the private sector, with goals such as raising its GDP contribution to 55–58% and growing the number of businesses to two million by 2030. Supporting policies include tax and fee exemptions for SMEs in their first three years, encouragement of cash-flow-based lending over collateral-based models, and reduced land lease fees for high-tech firms, SMEs, and innovative startups.

Third, there is a move toward removing credit growth caps (“credit room”), which could allow well-capitalized banks with low funding costs and loan-to-deposit ratios to compete more effectively. Borrowers with good credit histories would no longer be restricted due to quota limits, and underperforming banks would need to improve to remain competitive. This shift is also expected to eliminate the common practice of credit surges at quarter- or year-end, allowing credit to flow more efficiently to where it is needed.

Fourth, in the real estate sector, Resolution 68 has addressed long-standing legal and administrative hurdles. Key reforms include shifting from pre-approval to post-audit processes, promoting cash-flow-based lending and new development models, and clearly separating corporate and personal legal responsibilities.

MBS concludes that most banks are likely to meet their credit growth targets in 2025 despite pressure on NIMs. It also highlights that banks with high loan exposure to public investment projects and SMEs—two areas expected to benefit from favorable policies—are well positioned for stronger growth. Those maintaining stable NIMs and asset quality since 2024 and Q1/2025, while also achieving strong deposit growth in Q1/2025, are expected to have greater capacity to expand credit while ensuring safe liquidity ratios.