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Vietnam Banking H1 2026 Review and Outlook

Recently we visited five of Vietnam’s largest listed banks—state-owned leaders CTG and BID and leading private banks VPB, TCB and MBB—to hear directly from management about current challenges and the sector’s next phase of growth. These discussions reinforced our constructive view of the sector: Vietnamese banks remain resilient under more demanding conditions while building the capabilities to serve an increasingly large and sophisticated economy.

Resilient operating performance and strengthening structural drivers underpin a favorable outlook. In H1/2026, aggregate PBT among top 15 listed banks rose 20.8% y/y, supported by robust credit expansion, broader non-interest income, better recoveries and efficiency gains. This came amid tight system liquidity and moderating NIM, underscoring the sector’s earnings resilience. Beyond the near term, the sector is well positioned to sustain this momentum, bolstered by a favorable macroeconomic backdrop that should continue to generate strong credit demand. Additionally, as incomes rise and economic activity expands in scale and complexity, households and corporates naturally require a broader and more sophisticated range of financial services. Banks are well positioned to capture this expanding revenue pool through established customer relationships, funding, data and distribution. Continued digital and AI investment should support efficiency, risk management and product development, while closer alignment with international regulatory and disclosure standards strengthens resilience, transparency and access to global capital.

Equity capital raising from strategic investors offers an additional rerating catalyst. Sustained credit expansion and tighter prudential requirements are increasing banks’ capital needs, prompting several banks to actively explore strategic equity placements. At the same time, interest from foreign institutions appears to be increasing, reflecting the appeal of Vietnam’s fast growing banking market. Beyond reinforcing capital and expanding growth capacity, strategic partners could provide technical expertise, risk management capabilities and offshore funding access. Transactions completed above prevailing market valuations would also establish external pricing benchmarks and strengthen confidence in the sector.

This structural opportunity nevertheless comes with constraints. With credit already at ~145% of GDP and loan growth repeatedly outpacing deposit mobilization, liquidity and capital are increasingly important constraints on expansion. Competition for funding and higher interest rates should drive further gradual NIM moderation and may raise credit costs among rate-sensitive borrowers, while stronger prudential requirements could limit balance-sheet leverage. Even so, the overall balance remains favorable. The sector does not require wider margins or unconstrained liquidity to sustain attractive earnings: continued credit expansion, a broader fee pool, digital operating leverage, better risk decisions and stronger recoveries should continue to support earnings while improving the quality of growth.

Meanwhile, bank valuations have returned to historically attractive levels, with the sector currently trading at around 1.2x 2026F P/B and 7.7x 2026F P/E, after share prices were impacted by tight stock market liquidity, higher domestic interest rates and continued foreign selling, while the sector’s structural drivers remain intact. With banks representing ~35% of market capitalization, offering deep liquidity and a broad selection of investable names, the sector should be a major beneficiary of Vietnam’s FTSE emerging-market inclusion and any subsequent recovery in foreign participation.

Overall, the combination of durable financial demand, rising service intensity, improving institutional standards and reset valuations presents a compelling entry point into Vietnam’s long-term growth story.

We’ve condensed the highlights into a short video, featuring an AI avatar of our banking analyst – Hieu Le, should you prefer a concise, visual overview. Watch it below!