MBBank chairman suggests tighter control of 3 key cost drivers to lower lending rates

Vietnam's banking system needs to tighten control over three key cost drivers to sustainably lower lending rates and ease financial burdens on businesses, according to Luu Trung Thai, chairman of Military Commercial Joint Stock Bank.

Thai made the suggestion at a conference gathering government and corporate leaders on Friday, chaired by Prime Minister Pham Minh Chinh.

MBBank (MB) invests $50-100 million annually in science-technology, with spending reaching about $62 million last year, as part of its strong digital transformation strategy.

"As a result, over the past five years, MB has tripled its total assets, maintained annual revenue growth of around 25%, and expanded its customer base fivefold, becoming one of the country’s leading banks by customer scale," Thai told the conference.

Looking ahead, Thai said achieving the double-digit economic growth target would be challenging for the country in the short term and even more difficult to sustain over the long term.

"Maintaining macroeconomic stability - particularly stable and low interest rates - is critical to supporting business expansion and investment, with the banking sector playing a central role in supplying capital to the private sector," he stressed.

To reduce lending rates, Thai outlined three key factors that need to be tightly managed.

First is banks’ operating efficiency. Cost-to-income ratios (CIR) at well-managed banks are around 25%, compared with as high as 50% at others, indicating significant room for optimization.

Second is the cost of funds, particularly deposit interest rates, which depend on system liquidity and the smooth circulation of capital in the economy. Improved capital flows would help lower funding costs, he said.

Third is credit risk costs, especially provisions for non-performing loans, which account for roughly 18% to 20% of total costs in the banking sector. Reducing these costs requires stronger risk management by banks and improved financial discipline among borrowers.

“If the balance of rights and responsibilities between lenders and borrowers is ensured, credit risk costs will decline, creating room to lower lending rates further,” he said.

On long-term growth, the MB chairman noted that Vietnam needs to identify key industries where it has a genuine competitive advantage globally, starting with efficient use of existing resources and advancing into core technologies and industries.

He suggested the government introduce targeted policies to encourage long-term private investment and help businesses build distinct core capabilities, thereby strengthening the country’s economic competitiveness.

MB aims to reap pre-tax consolidated profit of VND39.5 trillion ($1.52 billion) in 2026, consolidating its position among the most profitable banks in Vietnam.

This will be an increase of 15% year-on-year. But MB strives to achieve 20%, chairman Luu Trung Thai told the group's investor meeting on February 2, 2026. Of this, subsidiaries are expected to contribute around 12-13%.

Apart from retail banking and lending for production and export activities, FDI customers, gold trading and digital assets (as a payment bank) will be new driving forces of growth, he noted.

In 2025, consolidated profit before tax reached nearly VND34.27 trillion ($1.32 billion), an increase of 19% from 2024. This was the first time pre-tax profit had topped VND30 trillion.

On the Ho Chi Minh Stock Exchange, MBB shares closed Friday at VND26,150 ($1) apiece.