Vietnam banks eye bull run

VIETNAM’S banking sector is gearing up for a defining decade, with investors eyeing the next growth cycle as the country doubles down on infrastructure, reform and private-sector expansion.

The momentum building today looks set to reshape credit demand, fatten bank balance sheets and create fresh openings for long-term capital.

Maybank Investment Banking Group Research (Maybank IBG) terms this as the start of a structural shift for the country’s banking sector.

As the investment bank puts it: “Vietnam is embarking on its second wave of economic reform, positioning the private sector as the key growth driver.”

It is this pivot, it says, that is widening the growth runway for banks and pulling investors back into the sector after last year’s correction.

In its recent note, Maybank IBG highlights: “We expect sector-wide credit to sustain robust growth in the high teens over the next two years, led by corporate lending.”

Retail lending and wealth management, it adds, should gradually kick into gear as incomes rise and economic visibility improves.

That confidence stems partly from a more supportive macro backdrop.

According to the brokerage, a more favourable macro backdrop, together with strong credit expansion, will help banks navigate mid-term net-interest-margin (NIM) pressure and maintain control over non-performing loan ratios.

In other words, margin compression may still linger, but not enough to derail profitability.

The research house sees stabilisation ahead, saying that for 2026, it forecast both NIM and provisioning rates to stabilise, supporting nearly 19% profit growth, on top of around 15% in 2025, and sustaining returns on equity (ROE) at around 17.3%.

Bright spot

Valuations are another bright spot, Maybank IBG states.

“Valuations have turned undemanding again following the October–November 2025 correction, reinforcing our constructive view on the sector,” it points out.

The group’s preferred exposures remain the large private-sector players – Vietnam Technological and Commercial Joint Stock Bank (TCB) and Military Commercial Joint Stock Bank (MBB) for those happy to buy and hold, and Ho Chi Minh City Development Joint Stock Commercial Bank (HDB), Saigon Thuong Tin Commercial Joint Stock Bank (STB), Joint Stock Commercial Bank for Foreign Trade of Vietnam (VCB) and Vietnam Prosperity Joint Stock Commercial Bank (VPB) for more active strategies.

Much of this optimism rests on Vietnam’s economic roadmap.

In August 2025, the government announced its 2026-30 plan, which sets a bold 10% annual gross domestic product (GDP) target.

Maybank IBG points out that the country is projected to invest about US$1.4 trillion over the next five years, with a strong focus on infrastructure to boost productivity.

A central plank is scaling up domestic private enterprises so they can take on bigger roles in national projects and integrate further into global supply chains – an agenda that banks are naturally positioned to support.

That push will also require deeper, more efficient capital markets.

As Maybank IBG explains, the government is working to upgrade capital markets and improve its sovereign rating.

“These initiatives will materially benefit local banks on both sides of their balance sheets – allowing them to raise funds at lower costs while expanding capacity for credit growth,” it states.

Internal drivers should help, too. The brokerage’s models suggest the economy is likely to grow 8% to 10% over 2026–2027, propelled by public investment and domestic-consumption stimulus.

On that basis, Maybank IBG projects sector-wide credit growth to remain robust at around 18% in 2026 and 16% in 2027, with potential upside should global capital markets stabilise and foreign-exchange pressures ease more quickly.

Stabilising NIMs

Banks’ NIMs look steadier than in recent years.

Maybank IBG notes: “We forecast NIM to stabilise at 3.2%-3.3% on average, while banks are expected to manage provisioning rates appropriately to meet earnings targets.”

It adds that private-sector banks will continue to outpace the rest of the market, highlighting names such as TCB, MBB, HDB, VPB and Saigon-Hanoi Commercial Joint Stock Bank (SHB) as potential leaders.

To understand why momentum is building, it helps to look at the political backdrop.

Vietnam’s new leadership, installed in mid-2024, has been vocal about accelerating growth, Maybank IBG says.

It recounts that the country’s general secretary has expressed admiration for the economic “miracles” of South Korea and Taiwan, and has articulated Vietnam’s own aspiration for “the miracle on the Hong River”.

The government’s investment targets – US$250bil-US$280bil annually from 2025 to 2030 – echo that ambition.

Sectorally, corporate lending is expected to break out of its past confines.

The analysts note that “corporate banking growth [is set] to expand meaningfully into the construction and utilities sectors” in the coming two to three years.

Over time, manufacturing lending should also accelerate as local firms scale and integrate deeper into global value chains, setting the stage for stronger retail-banking demand.

Rating upgrade

Another powerful catalyst could be a sovereign rating upgrade.

Maybank IBG writes that the government is pushing hard for FTSE and MSCI market-status improvements and targeting an investment-grade sovereign rating.

Its past country studies show that offshore borrowing costs could decline by 150-300 basis points following such an upgrade, which would directly lower funding costs for banks and corporates.

The bottom line is that growth looks sustainable.

The brokerage points out: “We estimate aggregate profit for the 17 major listed banks to rise nearly 19% year-on-year in 2026, following about 15% growth in 2025, with sector ROE sustained at around 17.3%.

For investors, timing matters

Bank shares soared in the first eight months of 2025, peaking with a 51% return for the 17 listed players. Then came the October–November pullback, when sector stocks dropped 24%.

The reset, Maybank IBG argues, has created a fresh window. “Following this correction, the Vietnamese banking sector is now trading at 1.44 times 2025 price-to-book ratio (P/B) and 1.22 times 2026 P/B, levels that appear undemanding for 12-month forward-looking positions.”

“Lessons from the 2019-2025 period reinforce our conviction that investing in banks entering a strong growth cycle at undemanding valuations can be highly rewarding,” it adds.

With 2026 shaping up to be a year of progress on market upgrades and economic execution, Maybank IBG believes Vietnam could see another strong bull run led by banks.

Risks remain, however.

Global-market disruptions and delays in the US Federal Reserve’s rate-cut cycle are top of the list.

Either would restrict Vietnam’s ability to raise external funds and slow the entire nation-building push, the brokerage argues.

But the structural story is intact.

“Banks, especially the large and well-capitalised ones, are key beneficiaries of the nation-building journey,” it asserts.

Its top picks are TCB and MBB. For active-trading positions, it highlights HDB, STB, VCB, and VPB.