Financial institutions expect the total outstanding loans for the entire system to increase by 3.4% in the first quarter of 2025, twice as high as the growth rate in the first quarter of 2024.

The Department of Forecasting and Statistics (State Bank of Vietnam) has recently published the results of a survey on the business trends among financial institutions for the first quarter of 2025. 

According to the results of the survey, credit institutions anticipate a growth of 3.4% in total system credit in the first quarter of 2025, and a remarkable increase of 14.2% for the entire year of 2025. This forecast has decreased slightly by 0.2% compared to the 14.4% in the previous survey but increased significantly compared to the credit growth in the first quarter of 2024, which was a mere 1.34%. Short-term credit is expected to grow at a faster pace than medium and long-term credit throughout both the first quarter and the entirety of 2025.

Deposit and lending interest rates are forecast to increase by about 0.2-0.3% throughout the entirety of 2025.

Credit institutions expect capital mobilization across the system to increase by an average of 3.5% in the first quarter of 2025 and by 12.8% in 2025. Funding mobilization for terms under one year is projected to experience growth comparable to that of terms exceeding one year in 2024 and the first quarter of 2025. The report indicates that the liquidity within the banking system in the fourth quarter of 2024 remained in a "good" state and continued to improve compared to the previous quarter, although it did not meet expectations.

Banks have become increasingly optimistic regarding asset quality. Credit institutions have observed a declining trend in the non-performing loan ratio in the fourth quarter of 2024 compared to the previous quarter, and anticipate further reductions in the first quarter of 2025.

According to estimates from credit institutions, at the end of 2024, the average bad debt ratio of the entire system has been adjusted downwards compared to the anticipated level in the previous survey, and is lower than the bad debt ratio at the end of 2023. Credit institutions expect the bad debt ratio by the end of 2025 to continue to be adjusted down compared to the estimated level at the end of 2024.

With expectations for credit to continue improving, 85% of financial institutions anticipate profit growth by 2025. However, 9.6% of these institutions express concerns about a potential negative profit growth in 2025, while 5.3% expect their profits to remain unchanged.

Kylie Nguyen