Vietnam banks see narrowing margins and modest valuations amid slowing profit growth

Analysts note that Vietnam’s equity market is trading at a low overall P/E of about 14.0×, below the 10‑year average of 14.9×. The banking sector drives much of this discount, with major state‑owned banks priced at roughly 9.4×, about 20% under historic levels. Net interest margins (NIM) have fallen to a historic low of 2.87% in Q1 2026, while non‑performing loans have edged up to 2.0% and the loan‑to‑deposit ratio surged to 113.9%, pressuring banks to keep deposit rates high.

Profit growth is expected to decelerate, with total after‑tax earnings for listed firms projected to rise only 14.1% in 2026 – the weakest in three years – and banking profits likely to lag the broader market. Nonetheless, experts argue that large state banks may benefit from Resolution 79, increased public‑investment financing, and potential foreign‑ownership caps, providing room for capital raises. Private banks such as VPBank, Techcombank and ACB are seen as well‑positioned through strong asset quality and high CASA balances, which could help sustain NIM.

Overall, while short‑term upside appears limited, analysts consider bank stocks reasonably valued for medium‑ to long‑term investors, citing low P/B multiples relative to a five‑year historical average.