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Techcombank (TCB VN) – Q2 2025 – Credit Grows 19.8%, TCBS IPO in Focus
Summary of Q2 2025 results and outlook of Techcombank (TCB VN)
- The bank accelerated credit growth while maintaining solid asset quality. However, net profit edged down by 1.5% y/y due to continued pressure on net interest margin (NIM). Total credit expanded by 19.8% y/y, driven by a strong rebound in the real estate market that boosted financing demand from both developers and homebuyers. However, NIM contracted notably by 100bps as the bank maintained low lending yields to remain competitive in a stimulative low-rate environment, while funding costs began to rise amid strong funding demand to support rapid credit growth. Net fee income (NFI) declined by 15.1% y/y, primarily due to the reclassification of letter of credit products into interest income. Despite this, investment banking (IB) fees rose 39.9% y/y, on the back of a surge in bond underwriting and distribution volume from Techcom Securities (TCBS), which continues to maintain its dominant market share in this segment. Bancassurance also regained growth momentum, rising 15.4% y/y following its business model transformation. On the cost side, operating expenses edged down by 1.1% y/y, contributing to a healthy cost-to-income ratio (CIR) of 29.2%. Notably, most of the savings came from reduced staff costs, while more resources were allocated to technology infrastructure. Regarding asset quality, the NPL ratio inched up slightly to 1.3%, while provisioning dropped 26.3% y/y thanks to improved economic conditions.
- Momentum builds for TCBS’s IPO, raising optimism for further re-rating of TCB. In H1/2025, a series of developments signaled accelerating progress toward the planned listing of TCBS. At TCB’s AGM, the Chairman confirmed ongoing discussions with major investors who recognize TCBS’s strong market position. In June, TCBS completed a private placement to senior executives and later submitted documents seeking shareholder approval for an IPO of a 10.0% stake, along with a proposal to raise its foreign ownership limit to 100%. To support the IPO process, the brokerage has actively conducted investor roadshows to present its outlook and investment case.
- For the second half of 2025, we expect strong credit growth to continue, while NIM stabilizes, supported by: (1) a pickup in retail lending as rising incomes, driven by robust economic performance, which also help improve loan yields; and (2) lending rates remaining accommodative amid the government’s continued push for high growth. Fee income is also projected to recover, underpinned by solid contributions from corporate bond underwriting and distribution, along with a rebound in bancassurance
Interested in TCB? Click here to read more of our previous analysis on TCB’s quarterly earnings.
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