Positive outlook: A shopkeeper waiting for customers in Hanoi. The country’s bad debt ratio decreased in 4Q24 compared to the previous quarter, with the ratio expected to continue falling in 1Q25. — AFP
HANOI: The majority of credit institutions forecast their business performance in the first quarter of 2025 (1Q25) and the whole year of 2025 will be more positive than that last year, the latest survey of the State Bank of Vietnam (SBV) shows.
Under the SBV’s 1Q25 survey on business trends of all credit institutions, conducted from Nov 25 to Dec 10, 2024, 74.6% and 84.2% of credit institutions predict their business situation to improve in 1Q25 and the whole year of 2025, respectively.
In 2025, 85.1% of credit institutions expect their pre-tax profits to grow positively compared to 2024.
Only 9.6% of credit institutions are still concerned about negative profit growth in 2025 and 5.3% forecast that their profits will remain unchanged.
According to the survey, in 1Q25 and the whole year of 2025, credit institutions expect customers’ demand for banking services to improve at a greater pace than in 4Q24.
In particular, the demand for loans is expected to continue to improve more than the demand for deposits and payments.
However, credit institutions expect to slightly increase the average price of products and services, mainly service fees, in 1Q25 and subsequently the whole year of 2025.
Credit institutions forecast that the liquidity situation will continue to improve in 1Q25 and the whole year of 2025, with capital raised to increase by 3.5% in 1Q25 and 12.8% in 2025.
Capital mobilisation with terms of less than one year is forecast to grow at the same rate as with terms of more than one year in 1Q25.
Regarding risks, under the latest survey, credit institutions expect that the risk level to be relatively stable in 1Q25 and a gradual decrease in 2025.
The overall risk level of customer groups still increased slightly in 4Q24 and in the whole year of 2024 compared to 2023, but the growth rate slowed significantly compared to 2023.
Credit institutions said the bad debt ratio tended to decrease in 4Q24 compared to the previous quarter and expect the ratio to continue to decrease in 1Q25.
By the end of 2024, credit institutions estimated that the average bad debts out of credit outstanding loans of the entire banking system were down compared to the expected level in the previous survey and lower than the bad debt ratio at the end of 2023. The institutions forecast that the average bad debts from outstanding loans of the entire banking system, by the end of 2025, will continue to be adjusted down compared to the estimated level at the end of 2024.
According to the survey, the total amount of outstanding loans of the banking system is forecast to increase by 3.4% and 14.2% in 1Q25 and in 2025, respectively, down 0.2 percentage points from the forecast from the previous survey.
The short-term credit growth rate is predicted to be higher than the medium and long-term growth rate in most credit institutions in 1Q25 and the whole year of 2025. — Viet Nam News/ANN
