Vietnamese Banks Report Rising NPLs in H1 2026, Outpacing Credit Growth

Overview

Vietnamese banks reported rising non-performing loans (NPLs) in the first half of 2026, with NPL growth at several institutions significantly outpacing credit expansion. MB (HOSE: MB) saw NPLs jump 26.8% to VND 17,797 billion, while ABBank (HNX: ABB) experienced a 4.5-fold increase in substandard loans. This signals mounting asset quality pressure across the sector.

Key Facts

• MB’s total NPLs (groups 3-5) rose 26.8% to VND 17,797 billion as of June 30, 2026, versus 14,027 billion at end-2025.
• MB’s credit growth was 13.2% in H1 2026, roughly half the NPL growth rate.
• MB’s NPL ratio increased from 1.29% to 1.45%; loss loans (group 5) surged 36.2% to VND 8,747 billion.
• MB’s substandard loans (group 3) rose 41% to VND 4,622 billion; watch-list loans (group 2) increased 17.4% to nearly VND 12,000 billion.
• ABBank’s substandard loans jumped from over VND 177 billion to over VND 816 billion, a 4.5x increase.
• Techcombank (HOSE: TCB) added VND 972 billion in NPLs in H1 2026, a ~12% increase, keeping its NPL ratio at 1.1%.
• KienlongBank (HNX: KLB) saw loss loans rise nearly 25%, now over 55% of its total NPLs.

What Happened

According to financial reports for the first half of 2026, several Vietnamese banks experienced a notable deterioration in asset quality. At MB, total NPLs increased by 26.8% to VND 17,797 billion, while credit growth was only 13.2%. The bank’s NPL ratio rose to 1.45% from 1.29%, with the sharpest increase in loss loans (group 5), up 36.2% to VND 8,747 billion. Substandard loans (group 3) also climbed 41% to VND 4,622 billion, while doubtful loans (group 4) were nearly flat.

ABBank reported a dramatic 4.5-fold increase in substandard loans, from over VND 177 billion to over VND 816 billion, indicating emerging repayment difficulties among borrowers 91-180 days past due. Meanwhile, its loss loans remained nearly unchanged at VND 569 billion, suggesting slow progress in resolving legacy bad debts. Techcombank added VND 972 billion in NPLs, a 12% rise, keeping its NPL ratio at 1.1%. KienlongBank saw loss loans increase nearly 25%, now accounting for over 55% of its total NPLs. Bac A Bank (HNX: BAB) also reported a 5.9% rise in total NPLs to VND 1,540 billion.

Market Context

MB’s stock closed at VND 28,950 on August 2, 2026, reflecting investor sentiment amid the NPL data. The banking sector on HOSE and HNX has been under pressure as asset quality concerns mount. Most banks maintain NPL ratios below the 3% regulatory threshold, but the rapid growth in watch-list and substandard loans is a leading indicator of future NPL formation. VCBS Securities warns that banks with over 30% of loans in real estate are particularly vulnerable, given persistent high lending rates.

Strategic Significance

For long-term investors, the rising NPL trend underscores the importance of credit risk management and sector exposure. Banks with high real estate exposure, such as MB and Techcombank, may face increased provisioning costs and slower earnings growth. Conversely, banks with stronger underwriting standards and lower NPL ratios could gain competitive advantage. The data also highlights the need for investors to monitor asset quality metrics closely, as deteriorating NPLs can erode capital buffers and impact dividend payouts.

What to Watch

• Q3 2026 earnings reports for NPL ratio updates and provisioning expenses.
• MB’s progress in resolving group 5 loans, which surged 36.2%.
• ABBank’s ability to contain substandard loan growth and reduce loss loans.
• Any regulatory changes from the State Bank of Vietnam regarding NPL handling or credit growth targets.
• Real estate market conditions and lending rate movements, as they affect borrower repayment capacity.