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The outlook for Vietnam's banking sector in 2026 presents a notable paradox: despite mounting liquidity pressures, narrowing net interest margins (NIMs), and rising funding costs, many banks are still expected to deliver double-digit profit growth, with some forecast to double their earnings.

Unlike previous years, the key driver of bank profitability in 2026 is no longer NIM expansion. Instead, the industry's performance increasingly depends on a "VIP pass" known as credit growth quotas, along with specific asset-related catalysts.

The latest reports from Saigon Securities Inc. (SSI), MBBank Securities (MBS), Vietcombank Securities (VCBS), and An Binh Securities (ABS) all maintain a positive outlook for the banking sector this year.

SSI recently raised its forecast for industry-wide pre-tax profit growth to 17.6%, up from its previous estimate of 17%. Similarly, ABS expected the banking sector's profits to grow by around 18%.

However, behind these encouraging growth figures lies mounting operational pressure. According to several securities firms, the banking industry's narrative has shifted significantly in 2026.

While the 2023-2025 period was primarily driven by NIM recovery amid low interest rates, this year's focus has shifted toward cost control, expanding non-interest income, and leveraging policy advantages.

MBS recently issued a noteworthy warning that the gap between system-wide credit growth and deposit growth has exceeded VND1,400 trillion ($53.22 billion). This indicates that lending is expanding considerably faster than deposits from households and economic organizations.

As a result, liquidity pressure is expected to intensify during the second half of the year. To secure funding, many banks will likely raise deposit interest rates, causing funding costs to increase more rapidly than previously anticipated.

South Korean bank Shinhan believes the impact of higher interest rates will gradually become more apparent in the remaining quarters of the year. As funding costs rise while lending rates cannot be increased proportionately, many banks' NIMs are expected to continue narrowing. This is also why MBS has revised its banking sector profit growth forecast downward to around 18%, below earlier optimistic projections.

A widening divergence among banks has also become increasingly evident. While some lenders are expected to maintain profit growth exceeding 20%, others may record only single-digit growth or remain largely flat compared with the previous year.

The common characteristic among the banks expected to achieve the strongest earnings growth is their higher credit growth quotas.

Following their participation in restructuring weak financial institutions through the compulsory transfer mechanism, several banks have been granted significantly higher credit growth limits by the State Bank of Vietnam than the industry average. This has become the most important competitive advantage in an environment where sector-wide NIM remains under pressure.

VCBS expects MBBank to be one of the biggest beneficiaries of this policy. Its 2026 pre-tax profit is projected to reach VND42.76 trillion ($1.63 billion), representing growth of 20-21% year-on-year. The primary driver is annual credit growth that could reach as high as 35%, substantially outperforming the industry average.

Similarly, HDBank is expected to benefit significantly from the policy. VCBS forecasts the bank's 2026 pre-tax profit at nearly VND28.73 trillion ($1.09 billion), an increase of 35-36%. Besides its credit growth advantage, HDBank is also expected to benefit from its acquisition of Vikki Bank and the planned IPOs of subsidiaries HD Securities and HD Saison.

VPBank is also viewed positively thanks to its higher credit quota and the recovery of its retail banking business. VCBS projects the bank's whole-year profit to grow by approximately 22.4%, supported by contributions from its subsidiaries FE Credit and VPBankS.

According to analysts, as NIM continues to decline, expanding interest-earning assets has become the decisive factor for profitability. In other words, banks with larger credit growth quotas can offset lower lending margins by increasing loan volumes, thereby sustaining earnings growth.

Multi-trillion-VND earnings beyond core operations

In addition to favorable credit policies, several banks are expected to generate exceptional earnings from non-core income sources.

The most notable example is Sacombank. VCBS forecasts the bank's 2026 pre-tax profit at over VND15.23 trillion ($578.97 million), representing a remarkable 100% increase from the previous year.

The primary catalyst is the completion of its long-running bad debt resolution process, particularly involving collateral assets and legacy loans accumulated during its restructuring program.

MSB is also viewed as a bank capable of delivering significant upside surprises. Its 2026 pre-tax profit is forecast to reach VND 8.61 trillion ($327.3 million), up 22%. According to VCBS, the bank could recognize an additional VND1-1.5 trillion ($57 million) in earnings from debt recoveries and provision reversals during the second half of the year.

Meanwhile, VietinBank is expected to benefit from the transfer of the VietinBank Tower project. The transaction could generate approximately VND5 trillion ($190.07 million) in one-off profit if completed on schedule.

VCBS forecasts VietinBank's Q2 pre-tax profit at around VND15 trillion ($570.21 million), up 24% year-on-year, while full-year profit is expected to increase by approximately 20.6%.

Analysts believe these banks are particularly attractive to cash flow because their earnings outlook depends not only on traditional lending activities but also on unique earnings catalysts.

Another notable trend highlighted by MBS is the changing composition of credit growth.

Corporate lending has become the primary growth engine for the banking system. In particular, commercial real estate lending has expanded by 11.7% compared with the end of last year, supported by the resolution of legal obstacles affecting numerous property projects.

By contrast, retail lending continues to face greater challenges. Higher lending rates resulting from increased funding costs have slowed the recovery in demand for mortgages, consumer loans, and loans to household businesses.

This explains why many banks traditionally focused on retail banking have experienced slower profit growth.

VCBS forecasts that Vietnam International Bank's (VIB) Q2 profit will increase by only about 5% year-on-year to VND2.73 trillion ($103.79 million). Rising funding costs are placing considerable pressure on the bank's profitability.

Likewise, banks such as Asia Commercial Bank (ACB), Techcombank, and Vietcombank are expected to maintain stable earnings growth but are unlikely to deliver the sharp profit acceleration anticipated for banks benefiting from compulsory transfer policies or unique asset-recovery stories.

As NIM continues to narrow, competition within the banking sector is increasingly shifting toward cost optimization and operational efficiency.

MBS forecasts that MBBank will continue to lead the industry in return on equity (ROE), with an estimated 20.2%. Its advantages include a high CASA ratio, low funding costs, and strong risk management capabilities.

The next group consists of VIB (17.5%), ACB (17.2%), Vietcombank (16.9%), TPBank (16.9%), and VPBank (16.9%).

According to MBS, banking sector valuations remain below their five-year average, creating attractive long-term stock accumulation opportunities for investors.

However, rather than favoring highly speculative stocks, MBS recommends CTG of VietinBank, ACB, and VPB of VPBank for investment portfolios in the second half of 2026, citing their balanced combination of earnings growth, asset quality, capital strength, and attractive valuations.

Overall, 2026 marks a period of significant divergence within Vietnam's banking sector. While banks enjoying the "VIP pass" of generous credit growth quotas or possessing unique asset-recovery opportunities continue to accelerate, many others are adopting more defensive strategies in response to increasing liquidity pressure and rising funding costs.

As a result, this year's profit race is no longer an industry-wide story but rather a competition among banks with the strongest policy advantages, superior asset positions, and the greatest ability to adapt to the new interest-rate environment.

Source: Dinh Vu, Minh Hue

Photo: Photo by The Investor/Trong Hieu