Banks take cautious 2026 profit stance amid rising risks

Southern lender Sacombank plans pre-tax profit of $324 million, up 6.2 per cent from its 2025 performance. Total assets are projected to rise 10.2 per cent, pushing its balance sheet beyond the symbolic ‘one quadrillion VND’ ($40 billion) threshold, marking a milestone in both market position and financial capacity.

The bank targets outstanding loans approximating $28 billion, up 11.7 per cent, and total deposits of $36.8 billion, an increase of 10.2 per cent. It also aims to keep its on-balance-sheet bad debt ratio below 5 per cent.

These targets are considered conservative compared to previous years, reflecting a balanced approach between growth and system safety, while acknowledging the challenges faced in the recent period.

By the end of 2025, Sacombank reported consolidated pre-tax profit of $305 million, equivalent to 52 per cent of its annual plan. In the fourth quarter alone, the bank posted a loss of more than $132 million, mainly due to a sharp rise in provisioning expenses.

This underscores Sacombank’s proactive and prudent risk management strategy, aimed at strengthening its resilience amid rising market risks and ensuring readiness in handling legacy assets.

The move reflects a strategic focus on asset quality and sustainable medium- to long-term development, rather than short-term profit maximisation, laying the groundwork for balanced benefits among customers, partners, and shareholders.

Hanoi-based LPBank has announced documents for its 2026 annual general shareholders meeting, outlining a modest 5 per cent increase in 2026 profit to $599 million. Credit growth is expected at 11.7 per cent, reaching $17.5 billion, while total assets are projected to rise 1.6 per cent to $24.6 billion.

The bank described 2026 as a pivotal year in its new development phase, building on strong growth momentum in recent years.

LPBank aims to become the leading retail bank in rural areas and tier-2 cities on a digital platform, while ranking among the top five providers of priority banking services in major urban centres.

Despite modest profit growth, this bank plans to pay a cash dividend of up to 30 per cent. Specifically, distributable profit by the end of 2025 is estimated at $376 million, with $358 million proposed for dividend payments at the upcoming 2026 annual general shareholders meeting, scheduled for April 28.

This would mark the highest cash dividend payout in the bank’s history and one of the highest levels in the industry.

Meanwhile, southern lender Eximbank has approved a 2026 business plan targeting pre-tax profit of $163 million, 2.7 times higher than its 2025 result, equivalent to a 169 per cent increase.

By the end of 2026, total assets are expected to reach $12.4 billion, up 13 per cent, while deposits are projected to rise nearly 18 per cent to $9.3 billion, and outstanding loans to increase nearly 17 per cent to $9.14 billion. The bad debt ratio is to be kept below 2 per cent.

In 2025, Eximbank recorded pre-tax profit of $60.47 million, fulfilling just 29.1 per cent of its annual plan. The bank leadership described the year as a challenging yet decisive turning point.

A key highlight was a sharp increase in risk provisioning to $61.04 million, up 57.5 per cent on-year. This deliberate and cautious move was aimed at strengthening financial buffers and enhancing resilience against market volatility.

The higher provisioning costs inevitably reduced profit, but this decline was part of a calculated strategic approach.

Eximbank is currently focusing resources on comprehensive restructuring and system transformation. Operating expenses rose significantly due to investments in high-quality human resources and the implementation of key technology and operational projects to enhance long-term competitiveness.

Meanwhile, ACB targets a 16 per cent increase in its total assets by the end of 2026. Outstanding loans are expected to grow 16 per cent, within the credit growth limit approved by State Bank of Vietnam, while total funding (including valuable papers) is projected to surge 16 per cent.

The bad debt ratio will be kept below 2 per cent, and pre-tax profit is expected to increase 14 per cent compared to 2025, reaching $891 million.

In 2025, ACB saw a slowdown in profit growth, with pre-tax profit declining from $840 million to $782 million, down 7 per cent. In Q4 alone, the bank’s profit declined by nearly 39 per cent on-year.

The sharp decline in Q4, 2025 was mainly due to a surge in credit risk provisioning, which jumped from $5.9 million in Q4/2024 to $78.3 million in Q4/2025, an increase of more than $72 million or 13.2 times higher than the same period a year earlier.

ACB’s leadership acknowledged the short-term impact of the aggressive provisioning but described it as a necessary step.

“The significant increase in provisioning in 2025 is aimed at strengthening the risk buffer. Once this buffer is sufficiently built up, ACB will have greater room to support profitability in 2026, provided that debt recovery efforts are effectively implemented,” a bank executive said.

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