Vietnamese Securities Firms Post Lowest Profit in 4 Quarters as Proprietary Trading Backfires

Overview

Vietnamese securities companies reported their weakest quarterly profit in four quarters for Q1 2026, as proprietary trading losses and margin lending margin compression weighed on results. Aggregate net profit of 40 listed firms reached nearly VND 7,600 billion, with 17 companies suffering losses or year-on-year declines. The sector’s reliance on proprietary trading, a double-edged sword, backfired amid geopolitical volatility and rising interest rates.

Key Facts

• 40 securities companies reported total net profit of nearly VND 7,600 billion in Q1 2026, the lowest in four quarters.
• 17 out of 40 firms posted losses or profit declines year-on-year.
• EVS recorded a loss of VND 157.5 billion; VDS lost VND 24.2 billion; SBS lost VND 5.2 billion; OCBS lost VND 3.475 billion.
• VIX’s profit fell over 60% year-on-year; CTS’s profit dropped over 30%.
• SHS announced a strategy to reduce proprietary trading exposure from 52-55% to about 35% of revenue, shifting focus to margin lending and investment banking.
• TCBS raised nearly USD 500 million from foreign institutions and noted margin lending NIM is narrowing due to rising interest rates.
• Margin lending outstanding reached a new record, but net interest margin (NIM) is under pressure.

What Happened

According to a Tuoi Tre Online analysis of 40 listed securities companies, aggregate net profit for Q1 2026 was approximately VND 7,600 billion, the lowest level in the past four quarters. While still showing year-on-year growth, the figure masks significant weakness: 17 firms reported losses or profit declines. Most companies attributed the poor results to proprietary trading losses, with EVS specifically citing provisions for NVB shares that were actually collateral recovered from bad debts.

The article quotes Nguyen The Minh, Director of Investment Banking at ABS Securities, who described proprietary trading as a “double-edged sword.” Firms that focused on brokerage and margin lending fared better, while those that aggressively pursued proprietary trading faced larger risks when the market turned. The market was impacted by geopolitical factors, including the Middle East conflict, which led to portfolio provisions.

Market Context

Securities stocks have been under pressure amid the sector’s earnings downturn. VDS closed at VND 15 on April 10, 2026, down 0.33% on low volume. VIX closed at VND 18 on April 15, up 0.28% but with high volume of 48.3 million shares, suggesting active trading. The sector’s aggregate profit decline reflects broader market headwinds, including rising interest rates and geopolitical uncertainty. The HOSE-listed securities index has been volatile, with margin lending growth failing to offset proprietary trading losses.

Strategic Significance

The Q1 results underscore the structural challenge facing Vietnamese securities companies: the trade-off between proprietary trading and stable fee-based income. Firms like SHS are pivoting away from proprietary trading toward margin lending and investment banking, a strategy that may reduce earnings volatility but also cap upside in bull markets. The narrowing margin lending NIM, highlighted by TCBS, suggests that even the core lending business faces margin compression as interest rates rise and competition intensifies. For long-term investors, the sector’s profitability is increasingly tied to risk management and diversification, rather than market direction alone.

What to Watch

• Q2 2026 earnings reports from EVS, VDS, VIX, and SHS to see if proprietary trading losses persist.
• SHS’s progress in reducing proprietary trading exposure to 35% of revenue, as announced by CEO Nguyen Duy Linh.
• TCBS’s margin lending NIM trends and the impact of its USD 500 million foreign funding on lending capacity.
• Regulatory changes or SBV policy on margin lending rates and securities company capital requirements.
• Market volatility from geopolitical events, particularly the Middle East situation, which could further impact proprietary trading portfolios.