2 foreign banks see profit drop in Vietnam

According to its newly released financial report, HSBC Vietnam recorded a pre-tax profit of over VND2.03 trillion (US$76.8 million) in the first six months of 2025, down over nine percent year on year.

The decline was largely due to a reduction in core business performance.

HSBC’s net interest income fell to VND2.9 trillion ($109.4 million) from VND3.2 trillion ($120.4 million) in the first half of 2024.

Besides, net fee and commission income declined by more than 10 percent, while its securities trading activities incurred a loss of over VND1.7 billion ($64,400).

However, certain segments posted positive results that helped offset the overall decline.

Foreign exchange trading brought in a net profit of VND517 billion ($19.6 million), a surge of over 50 percent year on year.

Other business activities contributed VND133 billion ($5 million), marking a modest five-percent increase.

Despite these gains, HSBC's total operating expenses rose sharply by over 12 percent to over VND1.8 trillion ($70.6 million).

With its revenue declining, net profit was significantly impacted.

Although the bank slashed its credit risk provisions by nearly 70 percent compared to the same period last year, the reduction was not sufficient to reverse the downward trend in profitability.

As of the end of June, HSBC Vietnam’s total assets stood at over VND134 trillion ($5 billion), slightly down from the beginning of the year.

Customer deposits dropped by nearly five percent from the start of the year to around VND108.8 trillion ($4.1 billion), while customer lending also declined by some five percent, settling at just over VND65.6 trillion ($2.5 billion).

Similarly, South Korea’s Shinhan Bank Vietnam saw a 12-percent year-on-year decline in pre-tax profit, which totaled VND2.8 trillion ($105.5 million) in the first half of 2025.

The bank's net interest income dropped by eight percent year on year to VND3.9 trillion ($148.5 million).

Nevertheless, Shinhan enjoyed improvements in other financial metrics.

As of the end of June, the bank’s total assets reached VND207.2 trillion ($7.84 billion), up 6.5 percent from the start of the year.

Customer lending rose over seven percent from the end of 2024 to VND134.4 trillion ($5.1 billion), while customer deposits increased by more than six percent to VND124.8 trillion ($4.7 billion).

Domestic banks outperform

In contrast, domestic banks have shown strong performance.

The combined pre-tax profit of 27 Vietnamese banks listed on the stock exchange reached nearly VND89 trillion ($3.4 billion) in the second quarter of 2025, up 17 percent year on year, fueled by robust credit expansion, effective bad debt recovery, and stable credit costs.

For the first half of the year, the cumulative pre-tax profit of these banks amounted to VND172 trillion ($6.5 billion), a 16-percent increase compared to the same period in 2024.

According to a report recently released by MB Securities (MBS), as of August 29, the banking sector had seen a 20-percent year-on-year increase in outstanding credit.

Credit growth among listed banks is projected to hit 14.8 percent by the end of the third quarter.

The current low interest rate continues to support credit demand, particularly in the retail segment, with mortgage and consumer lending expected to rebound strongly in the second half of the year.

Private banks are expected to outpace state-owned peers in credit growth, with projected increases of 18 percent and 12 percent respectively by the end of the third quarter of the year.