Vietnamese Bank Valuations Hit Multi-Year Lows: VPB, HDB, MBB in Focus
This Aveluro analysis covers VPB (VPBank) on HOSE in the Banks sector. The classified event type is sector sentiment, with positive sentiment and a deterministic market-impact score of 4.0/10. Aveluro classifies this story as a positive catalyst in the stock's news coverage. Source coverage came from VnEconomy - Chứng khoán, classified as a primary/top-tier source.
Key Facts
Caveat: Not investment advice. · How Aveluro computed this: Aveluro combines extracted event facts, source credibility, ticker context, and market data. Scores are deterministic research signals, not recommendations.
Overview
Vietnamese banking stocks are trading at their lowest valuations in years, with sector P/E at 8.6x and P/B at 1.35x, according to SHS Securities. This comes despite strong profit growth: SSI reports a 27.6% YoY increase in pre-tax profits for banks under coverage. VPB, HDB, and MBB stand out with exceptional earnings growth, but analysts caution about deteriorating asset quality and advise selective stock picking.
Key Facts
- Sector P/E at 8.6x and P/B at 1.35x, comparable to historical crisis levels (SHS Securities).
- SSI reports total pre-tax profit growth of 27.6% YoY and 20.3% QoQ for banks in its coverage.
- VPBank (VPB) profit growth: 76% YoY; HDBank (HDB): 51% YoY; MBBank (MBB): 41% YoY.
- NPL ratio in Q2 reached the highest level since 2020, while coverage ratios declined (SSI).
- VPBank’s consolidated total assets exceeded VND 1.5 quadrillion at end-Q2 2026.
- VPB closed at VND 26 (+1.36%), HDB at VND 28 (+2.20%), MBB at VND 21 (+0.48%) on 2026-08-24.
What Happened
Vietnamese bank stocks have corrected sharply since late Q2 and early Q3 2026, pushing valuations to multi-year lows. DSC Securities notes that most banks are now trading below their 5-year average. SHS Securities, in its August strategy report released on August 6, highlighted that the sector’s P/E of 8.6x and P/B of 1.35x are comparable to historical crisis periods.
Despite the low valuations, earnings remain robust. SSI’s banking sector update shows pre-tax profits grew 27.6% YoY and 20.3% QoQ. VPBank leads with 76% YoY profit growth, followed by HDBank at 51% and MBBank at 41%. However, SSI warns that the NPL ratio hit a post-2020 high in Q2, and coverage ratios are declining. NIM recovery is also uncertain as funding costs rise.
Market Context
VPB (HOSE) closed at VND 26 on August 24, up 1.36%, while HDB (HOSE) rose 2.20% to VND 28 and MBB (HOSE) gained 0.48% to VND 21. The banking sector has been under pressure due to high interest rates and capital costs, but recent profit growth suggests underlying strength. Analysts at VDSC rank banks as the top core holding sector, outperforming rubber, construction, and steel. However, they emphasize stock selection over sector-wide exposure due to asset quality risks.
Strategic Significance
For long-term investors, the current valuation discount in Vietnamese banks presents a potential entry point, but differentiation is key. VPBank stands out due to its scale, strong credit growth headroom from mandatory transfer, and direct benefit from policy support. HDBank and MBBank also show robust earnings growth. However, the rising NPL ratio and declining coverage ratios highlight the need to monitor asset quality. Banks with strong capital positions and provisioning buffers are better positioned to navigate potential credit stress.
What to Watch
- Q3 2026 earnings reports for VPB, HDB, and MBB, due in October, to confirm profit growth sustainability.
- NPL ratio and coverage ratio trends in upcoming quarterly disclosures.
- NIM recovery as funding costs evolve; watch for any policy rate changes by the State Bank of Vietnam.
- Credit growth data, especially for VPBank, which has higher headroom due to mandatory transfer.
- Any regulatory updates on market upgrades or policy support that could boost banking sector sentiment.