Vietnam s bank stocks enter a new phase of selective gains
Bank stocks are attracting renewed interest as market upgrades draw foreign capital but gains will be selective Ngo The Hien deputy director of the Analysis Centre at Saigon Hanoi Securities told em VIR s em Nhue Man that growth quality profitability and management will increasingly drive valuations
Bank stocks in Vietnam are experiencing selective gains after a recent divergence. The banking sector's stock price performance since the beginning of the year has closely followed the overall market. As of September 9, bank stocks had gained 3.17%, compared to a 2.39% increase in the VN-Index. Net profit after tax at 27 listed banks increased 19.6% year-on-year for the first six months of the year.
Analysts believe the market is cautious about bank stocks due to lower market liquidity and concerns over a less favorable business environment.
At the individual stock level, price divergence has been notable, with only nine out of 27 bank stocks outperforming the VN-Index. Growth remains the primary driver of share prices, with company-specific catalysts such as capital increases, mergers, acquisitions, or exceptional earnings growth playing a role. Despite this, the banking sector's price-to-book ratio stands at 1.42x, compared to a 10-year average of 1.7x.
The State Bank of Vietnam (SBV) has taken a cautious approach to credit management, targeting credit growth of 15% by year-end, below the 19% recorded in 2025. Total system credit stood at approximately $812 billion as of July 31, up 8.98% from the end of 2025. This provides room for further growth in the remaining months of the year.
Monetary policy has shifted towards targeted support as exchange-rate and energy-price pressures ease. Measures such as the special mechanism, raising the cap on short-term funds for lending, and allowing banks to count term deposits towards the loan-to-deposit ratio have helped improve system liquidity.
Rapid credit growth poses risks to bank profits, with indicators such as the rise in non-performing loan balances and increasing credit-loss provisions to monitor for emerging asset-quality pressures. Banks will need to restructure loan maturities, diversify revenue streams, increase digital transformation, and strengthen their capital base to maintain efficiency and profitability.
Written by urgent.news from Vietnam Investment Review's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
