KienlongBank (KLB) Q3 Profit Falls 13% on Preferential Credit Programs

Overview

KienlongBank (ticker KLB, HOSE) reported third-quarter after-tax profit of approximately VND 430 billion, down nearly 13% year-on-year, and attributed the decline to preferential credit programs implemented in line with State Bank of Vietnam direction. The result contrasts with a 20% rise in interest income and an 11% increase in nine-month cumulative profit to nearly VND 1,370 billion, leaving investors to weigh margin concessions against volume growth.

Key Facts

• Q3 after-tax profit of about VND 430 billion, down nearly 13% versus the same quarter last year.
• Nine-month cumulative after-tax profit of nearly VND 1,370 billion, up 11% year-on-year.
• Q3 interest income from lending reached nearly VND 2,280 billion, up almost 20% year-on-year.
• Nine-month lending income exceeded VND 6,300 billion, an increase of nearly VND 1,000 billion.
• Total loans outstanding stood at roughly VND 78,500 billion at end-September, up nearly 10% from end-2025.
• Customer deposits reached more than VND 81,800 billion, up nearly 14% from the start of the year; total assets were close to VND 116,000 billion.
• In August the bank announced lending rate cuts of up to 2.5 percentage points per year, focused on small and medium-sized enterprise clients.

What Happened

In a filing to the Ho Chi Minh City Stock Exchange on the morning of 26 October, KienlongBank management said the main driver of the profit decline was the rollout of preferential credit programs under State Bank of Vietnam guidance. The bank had announced in August that it would cut lending rates by up to 2.5 percentage points per year, concentrated on small and medium-sized enterprise borrowers, framing the move as sharing difficulties with the broader economy.

The filing also shows that the bank’s average lending rate actually rose during the quarter, from 9.05% in July to 9.37% in September, even as headline profit fell. Management credited the nine-month result to operational process improvements, higher labor productivity, cost control and better asset quality. The filing does not disclose the cost of the preferential programs or the specific margin impact by product.

Market Context

KLB closed at VND 11,350 on 25 October 2026 on HOSE. The bank’s loan book remains heavily concentrated: corporate borrowers account for nearly 82% of outstanding loans, with the remainder split between household businesses and individuals, and construction alone represents 52% of lending, equivalent to about VND 41,000 billion. That concentration makes KLB sensitive to construction-sector credit demand and to policy-driven rate directives affecting corporate borrowers. The bank’s full-year pre-tax profit target is approximately VND 2,600 billion, with total assets projected above VND 117,000 billion and credit growth guided at 12-14%.

Strategic Significance

The quarter illustrates a structural tension for KLB: policy-aligned lending concessions compress reported profit even as the loan book and interest income expand. Headcount fell by more than 600 to about 2,600 employees since the start of the year, signaling that cost efficiency is being used to offset margin give-up. For long-term holders, the key question is whether the preferential programs are a temporary, directive-driven cost or a permanent repricing of the SME lending franchise. The heavy construction concentration adds a second variable, since asset quality in that segment will determine whether cost control can keep supporting earnings.

What to Watch

• Full-year 2026 results against the roughly VND 2,600 billion pre-tax profit target.
• Disclosure of the cost and duration of the preferential credit programs in the annual report.
• Quarterly average lending rate trend, which rose to 9.37% in September from 9.05% in July.
• Asset quality indicators for the construction segment, which represents 52% of the loan book.
• Credit growth against the 12-14% full-year guidance and any further State Bank of Vietnam rate directives.