Vietnam Banks Q2 2026: Profit Up 27.6%, NPLs Rise 21.4%

Overview

SSI Research reported that Vietnam’s banking sector achieved a 27.6% year-on-year profit growth in Q2 2026, with total pre-tax profit reaching VND 95.7 trillion. The strong performance was led by state-owned banks VCB, CTG, and BID, but was tempered by a 21.4% YTD increase in non-performing loans (NPLs) and a decline in the NPL coverage ratio to 83%.

Key Facts

• Total pre-tax profit of banks under SSI Research coverage reached VND 95.7 trillion in Q2 2026, up 27.6% YoY and 20.3% QoQ.
• VCB led with a 58% YoY profit increase, followed by CTG (+22% YoY) and BID (+20% YoY).
• H1 2026 profit completion rate stood at 49.4% of full-year forecasts.
• NPLs industry-wide rose 21.4% YTD and 9.5% QoQ, with notable increases at CTG (+21.8% QoQ), STB (+15.6% QoQ), HDB (+17.6% QoQ), and BID (+7.2% QoQ).
• NPL coverage ratio fell to 83% in Q2 2026, down from 86% in Q1 2026 and 95% in Q4 2025.
• Credit growth was driven by real estate developers (+22% QoQ), trade/wholesale/retail (+6% QoQ), and financial services (+20% QoQ).
• Mortgage lending slowed across the sector, with VPB up only 2.4% QoQ, HDB flat, and TCB down 1.4% QoQ.

What Happened

According to SSI Research’s sector report, the banking industry’s Q2 2026 results exceeded expectations, primarily due to strong net interest income, improved non-interest income, and lower credit costs. The research firm noted that state-owned commercial banks led the growth, with VCB, CTG, and BID posting robust numbers, while STB and MSB underperformed.

SSI Research highlighted that banks returned to core lending segments after diversifying in Q1 2026. Banks with ample credit headroom, such as MBB, VPB, HDB, TCB, TPB, and VIB, increased disbursements to real estate developers, trade, and financial services. In contrast, state-owned banks and ACB focused on large corporate and household business lending.

Asset quality showed divergence, with NPLs rising 21.4% YTD. The increase was concentrated at CTG, STB, HDB, and BID, while most other banks remained stable. The NPL coverage ratio declined to 83% from 86% in Q1 2026, indicating reduced buffers against potential losses.

Market Context

Vietcombank (VCB), trading on HOSE, closed at VND 59,000 on August 6, 2026. The banking sector’s strong profit growth has supported valuations, but rising NPLs and a falling coverage ratio may temper investor sentiment. The sector’s performance is closely tied to credit growth and asset quality, which are key indicators for the broader Vietnamese market.

Strategic Significance

For long-term investors, the Q2 2026 results underscore the resilience of Vietnam’s banking sector, driven by robust credit demand and improving margins. However, the uptick in NPLs, particularly at major banks like CTG and BID, signals potential asset-quality risks. The declining coverage ratio suggests banks may need to set aside more provisions, which could pressure future profits. Investors should monitor how banks manage credit risk and whether the NPL trend reverses in the coming quarters.

What to Watch

• Q3 2026 earnings reports for major banks, especially VCB, CTG, and BID, to see if profit growth sustains.
• NPL trends and coverage ratios in the next quarter; a continued rise could trigger rating actions.
• Credit growth data, particularly in real estate and financial services, to gauge demand sustainability.
• Any regulatory changes regarding provisioning or capital requirements from the State Bank of Vietnam.
• Mortgage lending recovery, as high interest rates (12-14%) may dampen demand further.