19/09/2025 - 15:26
Bank Sector_Outlook and Company Updates
The Vietnam banking sector remains well-positioned for 2H25, supported by strong credit growth and the SBV’s accommodative monetary policy to support economic growth despite rising pressure on the USD/VND exchange rate.
Positive monetary outlook. The Fed’s nascent easing cycle should reduce exchange rate pressures and support continued loose SBV monetary policy, helping reduce funding cost pressures for the banks.
We expect NIM compression to persist in 2H25 anyway, as banks maintain low interest rates to support borrowers,
NPL recoveries as earnings driver. NPL recoveries helped boost earnings in 2Q25, and we believe this trend will persist in 3Q-4Q25, underpinned by the real estate market recovery and the codification of Resolution 42, which strengthens banks’ ability to seize and liquidate collaterals.
Overall asset quality should improve going forward, supported by: the real estate market upcycle, continued monetary policy easing, public infrastructure investment, and the codification of Resolution 42 into law.
CAR enhancement. Circular 14/2025/TT-NHNN will require banks, and especially the state-owned banks, to raise more capital. This should provide a strong catalyst for their share prices, in our view.
Listed companies can no longer cap the FOL below the legal limit, so banks might need to fully open their foreign ownership room to 30% going forward -a positive catalyst for the stocks. There are several banks with FOL locked below 30% (please see the 3rd chart on the left).
We remain Overweight the bank sector. Admittedly, the sector has gained 37% YTD, but this is only in line with the market. Additionally, we believe that several sector laggards offer catch-up potential, including ACB and VCB.
We maintain BUY on ACB, VCB, HDB, and VPB, but we downgrade MBB and TCB to HOLD-Outperform, as valuations cap the upside for these YTD outperformers.
For the complete report, please access here: Bank_Sector_Outlook and Company updates
Analyst: Tanh Tran, tanh.tran@yuanta.com.vn
