FE Credit H1 2026 Net Profit Plunges 43% Despite Revenue Growth to VND 10.2 Trillion

Overview

FE Credit, the consumer finance subsidiary of VPBank (HOSE: VPB), reported a 43% year-on-year decline in net profit to VND 152.6 billion for the first half of 2026, even as total revenue grew 7.7% to VND 10.2 trillion. The sharp profit drop was driven by credit risk provisions of VND 6.2 trillion, which consumed nearly 98% of pre-provision profit, highlighting ongoing asset quality pressures in Vietnam’s consumer lending sector.

Key Facts

• FE Credit’s H1 2026 total revenue reached VND 10,232 billion, up 7.7% from H1 2025.
• Net interest income contributed VND 7,998 billion; net fee income was VND 1,352 billion.
• Pre-provision profit stood at VND 6,310.8 billion, up 6% year-on-year.
• Credit risk provisions totaled VND 6,158 billion, equivalent to 97.6% of pre-provision profit.
• Net profit fell to VND 152.6 billion, down 43% from VND 267 billion in H1 2025.
• Total assets reached nearly VND 75,900 billion as of June 30, 2026, up 14% year-on-year.
• Total liabilities were VND 64,600 billion, up 16% from June 2025.
• VPBank owns 50% of FE Credit; SMBC Consumer Finance (Japan) holds 49%.

What Happened

According to VPBank’s consolidated interim financial report, FE Credit’s consumer lending and other financial activities generated total revenue of VND 10,232 billion in the first half of 2026, a 7.7% increase from the same period in 2025. Interest income accounted for the bulk at VND 7,998 billion, while net fee income contributed VND 1,352 billion and other operating income added VND 882 billion.

Despite the revenue growth and a 6% rise in pre-provision profit to VND 6,310.8 billion, the company’s bottom line was severely impacted by credit risk provisions of VND 6,158 billion. This provision charge represented nearly 98% of pre-provision profit, leaving net profit at just VND 152.6 billion, a 43% decline from VND 267 billion in H1 2025. The report indicates that FE Credit is expanding its balance sheet again, with total assets rising 14% year-on-year to VND 75,900 billion and total liabilities up 16% to VND 64,600 billion.

Market Context

VPB shares closed at VND 25,000 on July 20, 2026. The stock has been under pressure as investors weigh the pace of asset quality recovery at FE Credit, which accounts for a significant portion of VPBank’s consolidated earnings. The consumer finance sector in Vietnam has faced elevated non-performing loan ratios since the post-pandemic period, and FE Credit’s provision burden reflects the ongoing challenges in managing credit risk while pursuing growth. VPBank trades on HOSE.

Strategic Significance

FE Credit’s H1 2026 results underscore the tension between balance sheet expansion and credit cost normalization. The 14% asset growth suggests management is betting on a recovery in consumer demand, but the provision charge indicates that legacy loan impairments are still being recognized. The partnership with SMBC Consumer Finance provides capital and expertise, but the path to sustainable profitability depends on whether new loan origination quality can reduce the provision-to-revenue ratio over the next 12-18 months.

What to Watch

• VPBank’s Q3 2026 earnings release for trends in FE Credit’s provision coverage ratio and NPL formation.
• Any update on FE Credit’s loan book composition, particularly the share of restructured loans.
• SBV policy on consumer finance provisioning requirements and potential regulatory relief.
• SMBC Consumer Finance’s strategic stance on further capital injection or operational changes.
• VPBank’s consolidated NPL ratio and its impact on the bank’s overall capital adequacy.