Equity Analysis /

Vietnam Banks: More sustainable growth underpins stable outlook

    Lam Nguyen
    Lam Nguyen

    Banking, Market Strat

    Anh Nguyen
    Rong Viet
    11 September 2019
    Published by

    In this 30-page report we assess the industry-wide trends in the Vietnam banking sector, and provide company-by-company analysis.

    Earnings growth to return to a lower but more stable level

    • Interest income to slow down. NIM to improve selectively in some banks.
    • One-off earnings (from exclusive bancassurance agreement, divestments...) is less common. Income structure to become more sustainable.
    • Banks to spend more on digital push.
    • Provisioning burden to rise in certain banks, especially those with outstanding VAMC debts or has high NPL formation.
    • Overall, earnings growth to diverge.


    • Closer control over credit growth, as well as strict regulations on capital (ratio of short-term capital funding medium/long-term loans, Basel 2 capital requirement), might affect net interest margin and interest income growth more than expected.
    • Housing loans constitute the largest part of retail lending in most banks, posing a threat that the real estate sector falls into a downward cycle.
    • Difficulties in the consumer finance sector.