The Vietnamese banking sector’s profits in Q1/2026 showed a clear divergence, with growth seen among large lenders with strong capital and asset quality while smaller banks facing mounting pressure from rising funding costs and credit risks.

In the group of four state-controlled banks (Big 4), Vietcombank led with pre-tax profit of VND11,832 billion ($448.93 million), up 5.42% year-on-year.

VietinBank recorded VND11,139 billion, surging 63.3%, making it the fastest-growing among state-controlled banks, while BIDV reported VND8,571 billion, up 16.1%.

Among private banks, MBBank posted VND9,628 billion ($365.3 million) in pre-tax profit, up 14.8%; and Techcombank VND9,531 billion (+22.5%). VPBank and HDBank stood out with growth rates of 58% and 46%, respectively, signaling a recovery in core business drivers after a challenging period.

Not only are profits growing in absolute terms, but the pace of fulfilling annual targets among large banks is also high. VietinBank has completed 33.75% of the year's plan, HDBank 30.54%, while most others around 24-25%.

In contrast, the picture for small and mid-sized banks shows significant volatility. Some reported exceptional growth, such as ABBank (+260%), PGBank (+187%), and BVBank (+170%), but this largely stemmed from a low base or extraordinary income, rather than sustainable operational improvements.

Meanwhile, several banks posted weaker results. Sacombank reported VND2,106 billion ($79.9 million) in pre-tax profit, down 43% year-on-year, reflecting pressure from legacy asset settlement and increased provisioning. Banks like SeABank and Eximbank are facing similar challenges as provisioning costs surge.

Scale and asset quality set the rules of the game

Q1 developments point to a structural shift in the banking sector: credit growth is being allocated more selectively. Banks with larger scale, strong capital foundations, or involvement in system restructuring tend to receive higher credit growth quotas, allowing them to sustain expansion.

Conversely, smaller banks or those with weaker asset quality face tighter credit room, making their performance more dependent on short-term factors such as one-off income or cost-cutting.

Do Minh Phu, chairman of TPBank, likened credit limits to “a blanket that isn’t wide enough to stretch,” highlighting the challenge of balancing regulatory compliance with growth and efficiency amid cautious monetary policy.

According to SSI Securities, banking sector profits in 2026 may continue to grow at double-digit rates, but divergence between bank groups will become more pronounced. Banks with strong capital bases and better credit expansion capacity are expected to have the upper hand.

Meanwhile, Vietcombank Securities noted that net interest margins (NIM) may come under pressure in the second half of the year due to intensifying competition for deposits, forcing banks to rely more on credit growth to sustain profits.

One of the core factors driving divergence is asset quality. As of the end of Q1/2026, large banks continued to maintain good control of non-performing loans (NPLs). For example, Vietcombank posted a NPL ratio of 0.62%, ACB 0.97%, VietinBank 1.02%, and BIDV 1.3%.

In contrast, smaller banks reported higher NPL ratios, including MSB (2.66%), SeABank (2.24%), and Sacombank (around 2.2%). Rising bad debt led to higher provisioning costs, directly eroding profits.

In fact, some banks significantly increased provisioning in Q1. Eximbank recorded a more than 150% year-on-year rise in provisioning expenses. Many others also stepped up provisions to address emerging bad debts and strengthen financial buffers.

Credit growth of the banking industry has continued to outpace deposit growth, putting liquidity pressure on the banking system.

HÀ NỘI — Credit growth in Việt Nam’s banking sector has continued to outpace deposit growth, placing increasing pressure on system liquidity, analysts have said.

In a recent report on the banking industry for 2026, analysts at FiinRatings noted that credit growth of 19 per cent last year continued to far exceed deposit growth of 11.4 per cent and remained above the State Bank of Vietnam’s 15 per cent average target in previous years.

The strong expansion in lending was driven by infrastructure investment, industrial production supported by foreign direct investment inflows, a recovery in the real estate market and improving retail credit demand.

FiinRatings forecasts credit growth in 2026 will be lower than in 2025, as the current credit-to-GDP ratio remains high at over 140 per cent. The analysts said new State Bank of Vietnam regulations on credit growth limits for the real estate sector in 2026 are expected to slow lending to property developers.

They added that Basel III capital requirements and the gradual easing of credit quotas will likely lead to clearer differentiation in lending capacity among banks. Large banks with strong capital buffers are expected to expand market share while smaller lenders may need to moderate growth to balance capital, profitability and asset quality.

The report also said banking sector profits are expected to remain stable in 2025 despite narrowing net interest margins, with a growing shift towards non-interest income to support earnings.

According to analysts, profitability is being pressured by rising funding costs, asset quality concerns and tighter liquidity conditions.

The net interest margin of the banking sector is estimated to fall to around 2.9 per cent in 2025 from a peak of 3.8 per cent in 2022, leading to a slight decline in return on assets to around 1.4 per cent despite support from non-interest income and improved cost efficiency.

"In 2026, NIM is likely to remain below 3 per cent as funding costs increase amidst increasingly fierce competition for capital," said the analysts forecast.

The pressure on funding costs is closely linked to liquidity conditions. Credit growth has continued to outpace deposit growth by a wide margin, forcing banks to rely more heavily on interbank borrowing and bond issuance.

Liquidity indicators are weakening, reflecting the strain of sustaining high lending growth. As a result, deposit interest rates have begun to rise since the end of 2025 and may continue increasing in 2026, particularly for longer-term deposits. This is expected to further compress margins and prompt banks to adjust capital structures towards greater stability.

Based on these factors, profit prospects for 2026 are expected to diverge significantly, with capital strength, liquidity and income composition becoming key determinants of performance.

In particular, the group of four large private commercial banks is likely to maintain more stable net interest margins thanks to strong current account savings account (CASA) ratios and established customer ecosystems, supporting return on assets above the sector average although below previous peaks.

By contrast, State-owned banks are expected to face downward pressure on margins due to continued policy-driven interest rate support, with profit growth increasingly reliant on foreign exchange, gold trading and debt recovery.

Meanwhile, other commercial banks are likely to see the widest divergence in performance depending on their ability to expand retail lending and develop non-interest income streams.

The bridge spans roughly 2.36 km in Hue city, making it the longest sea-crossing bridge in central Vietnam.

After more than three years of construction, the Thuan An sea-crossing bridge—one of central Vietnam’s largest transport infrastructure projects and the longest of its kind in the region—has officially opened to traffic, creating a vital coastal corridor and new momentum for economic and tourism development in central Hue city.

The bridge is a key component of the coastal road project running through Hue. Construction began on March 24, 2022, with initial plans for completion by March 2025. However, delays in site clearance extended the timeline beyond schedule.

Phase 1 of the project has a total investment of around VND2.4 trillion (approximately $94 million), including more than VND2.08 trillion for construction. The route stretches about 7.8 km, starting at the intersection of National Highway 49B and Tam Giang Bridge, and ending at the junction of National Highways 49A and 49B.

The Thuan An bridge itself spans roughly 2.36 km, making it the longest sea-crossing bridge in central Vietnam, while the connecting road section extends about 5.3 km.

The bridge is expected to enhance the coastal transport network, ease congestion on existing routes, and unlock new opportunities for regional connectivity, marine tourism, and coastal services in Hue.

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