Vietnam's private lender ACB records 17 growth in Q1 profit, accelerates ecosystem expansion

Amid ongoing economic volatility, Vietnam’s Asia Commercial Bank (ACB) remains on track with its 2026 business plan, reporting estimated pre-tax profit of VND5.4 trillion ($205.09 million) in Q1, up 17% year-on-year and achieving 24% of its full-year target.

Solid Q1 performance and full-year targets

ACB targets 16% growth in total assets, credit and deposits this year, within limits set by the State Bank of Vietnam (SBV), CEO Tu Tien Phat told shareholders at the bank’s 2025 AGM on Thursday.

The lender aims to increase pre-tax profit by 14% year-on-year to nearly VND22.34 trillion ($848.3 million), while keeping its non-performing loan (NPL) ratio below 2%.

In Q1, ACB maintained stable operations and asset quality. Credit growth reached 3.2%, while growth of deposit and issuance of valuable papers rose 0.9%. The bank reported a CASA (current account savings account) ratio of 22.9% and a cost-to-income ratio (CIR) of 31.8%.

Asset quality remained a key strength, with Group 3-5 loans at 0.96%, slightly lower than 0.97% in 2025 and among the lowest levels in the banking sector.

Regarding shareholder returns, ACB approved a 20% dividend payout for 2025, including 13% in shares and 7% in cash, to be distributed by the end of Q2. The planned dividend for 2026 is 25%, comprising 15% in shares and 10% in cash.

Strengthening defensive strategy amid rising risks

At the AGM, chairman Tran Hung Huy highlighted that ACB delivered strong profit growth from 2013 to 2024, but saw a setback in 2025, completing only around 85% of the year's target.

He noted that a deeper review in late 2025 revealed emerging structural risks in Vietnam’s economy, including overheating in the real estate sector and rapid credit expansion.

Anticipating significant policy adjustments in 2026, the bank moved to strengthen its financial buffers by accelerating provisioning and conducting in-depth risk assessments toward the end of 2025.

These concerns materialized early this year as the central bank tightened policies, including adjustments to credit growth limits for real estate, he said.

While economic performance was strong in January and February, March brought heightened volatility. Geopolitical tensions involving Iran disrupted global energy markets, fueling inflation and putting pressure on economic growth and system liquidity, he noted.

Deposit rates have since risen sharply, liquidity has tightened, real estate demand has weakened, and the risk of rising bad debts has increased, creating a more uncertain macroeconomic outlook.

In response, Huy stated ACB is prioritizing a more defensive strategy, focusing on risk control, asset quality, and liquidity. At the same time, the bank is enhancing customer experience through technology and AI as part of its 2025-2030 strategy.

“In a highly volatile world, advantage lies not with the fastest movers, but with those who have long-term vision, disciplined execution, and strong foundations,” he said.

Expanding financial ecosystem by establishing non-life insurance subsidiary

At the AGM, shareholders also approved revisions to a plan to establish a non-life insurance subsidiary, supporting ACB’s broader strategy to expand its financial ecosystem.

CEO Tu Tien Phat said the move is part of ACB’s ambition to become a comprehensive and efficient financial group. Although the insurance market has faced challenges in recent years, ACB’s bancassurance segment rebounded by 33% year-on-year in Q1/2026.

The bank expects this segment to contribute around VND1 trillion ($37.97 million) in profit this year, he said.

Phat emphasized that non-life insurance, alongside life insurance, represents a high-potential growth area, with Vietnam’s insurance penetration still low at 2-3%. ACB plans to develop this segment using an insurtech model, focusing on digital distribution through its platform and subsidiaries, initially targeting its existing customer base.

Meanwhile, its securities arm ACBS remains a key strategic pillar. With Vietnam’s stock market expected to grow over the next 3-5 years, ACB plans to continue investing heavily in the unit, expecting it to become a major profit contributor.

On the Ho Chi Minh Stock Exchange (HoSE), ACB shares closed Thursday at VND23,850 ($0.91) apiece.