Vietnam Banking Sector: H2 2026 Outlook

As of June 26, 2026, system-wide credit outstanding topped VND 19.97 quadrillion, up 7.41% from year-end 2025 and 18.1% year-on-year. The State Bank of Vietnam (SBV) targets full-year credit growth of around 15%, but its own survey shows credit institutions have trimmed expectations to 14.5%, reflecting more caution for the second half. Credit mix is shifting toward medium- and long-term loans, prioritizing fixed-asset and infrastructure investment projects.

Q1 2026 pre-tax profit at 27 listed banks rose 14.2% year-on-year, but the picture is sharply divided: VPBank led with a forecast 64–67% jump thanks to the system's highest credit room (up to 35%) and FE Credit's recovery; HDBank grew more than 50%; Vietcombank kept the largest absolute profit (~VND 12,827 billion, +16%); while Sacombank was the only listed bank forecast to see profit decline, hit by a narrowing NIM and higher provisioning.

Sector-wide net interest margin (NIM) remains below 3% as funding costs rise, pushing banks to lean harder on non-interest income such as trade finance, guarantees and letters of credit. The Q1 2026 bad-debt ratio ticked up to around 2%, with loan-loss coverage holding steady near 80%. In under two months, the SBV rolled out a string of controlled easing measures: raising the short-term-funds-for-medium/long-term-loans ratio (SMLR) cap from 30% to 40%, exempting social housing and key infrastructure projects from real-estate credit-room limits (about VND 752 trillion of credit tied to Vingroup, Sun Group and Masterise), and piloting a roadmap to gradually phase out credit-growth quota allocation.

On valuation, after a hot rally through mid-2025, the banking sector has pulled back into a range many brokerages call attractive: sector-wide P/E of roughly 10.8–10.9x, about 10% below its historical median; average P/B for listed banks around 1.43–1.53x, below the 5-year average (~1.65x) — a rare valuation window last seen in the early days of Covid-19. Projected 2026 sector ROE of 17–18% outpaces Malaysia, Singapore and Thailand. Stocks with broad brokerage consensus buy ratings include VPB, MBB, ACB, CTG, TCB and MSB, combining strong profit growth with valuations that don't yet fully reflect asset quality.

Overall, the banking sector enters H2 2026 on a positive but uneven footing: NIM remains under pressure, bad debt is ticking up slightly, and the gap between large and small banks keeps widening. A selective, bank-by-bank strategy — rather than buying the sector broadly — remains the more sensible approach in this divergent phase.

Sources: SBV, SSI Research, ACBS, MBS, VCBS, Yuanta, VIS Rating (July 2026). For reference only; not personalized investment advice.