2026 is no longer the "cheap money" period as before, but the banking industry is still benefiting from its pillar role in providing capital to the economy as Vietnam sets high growth targets.
However, deposit interest rates have continuously increased recently, leading to increased capital costs for banks. Along with that, the banking system is tending to be more dependent on short-term capital sources, while the ratio of lending to deposits remains high. This makes the room to withstand liquidity shocks more limited than in previous periods.
In addition, the State Bank is implementing a "controlled expansion" policy, orienting capital flows away from speculative projects, and at the same time raising lending interest rates for the real estate sector, causing demand and access to capital to decline.
DSC Securities Company believes that the prospect of profit growth in 2026 continues to come from credit growth, although the rate is forecast to slow down. Credit growth advantage will belong to banks participating in the restructuring of weak credit institutions such as VCB, MBB, HDB and VPB, while banks with credit growth rates heavily dependent on the real estate market will be less positively affected.
Regarding non-interest income, growth is forecast to slow down due to unfavorable capital and securities business activities as government bond yields tend to increase; bad debt recovery activities slow down due to pressure on the liquidity of the real estate market. Regarding asset quality, when the economy recovered, the asset quality of the banking system showed signs of improvement.
DSC maintains the view that the banking industry is still in a growth cycle, with high credit growth and the economy continuing its expansionist trend. Indicators of profitability and asset quality all recorded improvements compared to the 2023-2024 period. However, systemic risks also increased as the economy heavily depended on bank credit, while the industry's resilience in terms of liquidity and capital was lower than in the previous period.
In the basic scenario, credit growth continues to be maintained at a high level to support the economy, exchange rates and inflation are still under control, and liquidity pressure is cooling down as the general level of interest rates has slightly increased.
The recent adjustment has opened up investment opportunities in banks with high growth rates and solid asset quality when valuation has returned to the attractive zone. Regarding asset quality, in the context of strictly controlling capital flows into the real estate sector and higher interest rates, bad debt pressure may return. We assess that banks with high provision buffers and lending portfolios less dependent on real estate will be a safe choice for investors," DSC Securities Company stated.
Kafi Securities Company believes that if exchange rate pressure and liquidity cool down according to the basic scenario, the State Bank may ease the credit limit selectively in the second half of the year, prioritizing banks with solid capital foundations and quality lending portfolios. Credit growth for the whole industry is expected to reach 15-16% and when asset yields are gradually revalued in the third-fourth quarter, NIM may recover slightly to 2.9%. Pre-tax profit for the whole industry can therefore still increase by 14-16% compared to the same period.
Regarding valuation, according to Kafi's point of view, the market is looking at the banking industry with a rather cautious mentality. The average P/B ratio is currently 1.5 times - lower than the 5-year average of 1.6 times and has relatively fully reflected short-term risks. In that context, the banking group with a thick reserve buffer, a high CASA ratio and a credit portfolio less dependent on real estate is being valued attractively.
In addition, the medium-term catalyst FTSE Russell upgrades Vietnam to the secondary emerging market, effective in September 2026, opening up room to welcome significant foreign capital in the listed bank stock group.
