#2 Highlights from the “Vietnam Credit Spotlight 2025” Conference – Outlook for Vietnam’s Banking Sector

Following the opening discussion on Vietnam’s economic outlook and sovereign credit rating, the Vietnam Credit Spotlight 2025 conference proceeded with its second key topic: Outlook for Vietnam’s Banking Sector.

Following the opening discussion on Vietnam’s economic outlook and sovereign credit rating, the "Vietnam Credit Spotlight 2025" conference proceeded with its second key topic: Outlook for Vietnam’s Banking Sector. As the Government pushes forward a new era of economic growth, developing the financial market to support the smooth circulation of capital has become a decisive factor in determining the success of the country’s current long-term economic strategy.  

With insights from Mr. Ivan Tan, Director of Financial Institutions Ratings at S&P Global Ratings, the session provided a comprehensive analysis of Vietnam’s banking sector - a vital pillar of the financial system and a key driver of economic growth. 

According to Mr. Ivan Tan: “Vietnam’s banking system is expected to maintain credit growth of 12-15% per year over the next 3-5 years”. The issue raised by Mr. Ivan is how the credit allocation will be made in the most efficient manner such as the application of a risk-based capital framework and the ability to improve the capital buffer given such a high credit demand. 

The ongoing recovery of Vietnam’s property and corporate bond markets may continue, underpinned by healthy economic growth prospects and Government-led regulatory reforms aimed at improving the legal framework for businesses. In particular, long-term structural reforms - such as amendments to the Land Law - could stimulate real estate activity, leading to improvements in asset quality and the expansion of bank balance sheets. 

Despite these positive factors, Vietnam’s financial landscape remains characterized by volatile credit cycles and fluctuating asset prices, which pose unique challenges to the banking sector. A key concern is the thin capital buffers at many Vietnamese banks. Consequently, these banks are likely to continue distributing stock dividends to ensure sufficient capital generation in line with loan expansion. 

“Our outlook for the banking sector remains stable" Ivan Tan noted. "However, a clear polarization will persist. Leading state-owned and top-tier joint-stock banks will continue to dominate in profitability and financial strength, while smaller banks will struggle with capital and asset quality challenges.”

From FiinRatings’ perspective, Mr. Nguyen Anh Quan, Senior Analyst and Senior Manager Financial Sector Ratings, emphasized that many banks could surpass the sector’s 16% credit growth target in 2025, but this rapid expansion may put significant pressure on asset quality, which has yet to show clear signs of improvement. He also highlighted that capital supplementation and risk control will be key to ensuring the stability of the banking sector, especially as regulatory policies become more stringent. 

Year 2025 also marks an important period for Vietnam’s banking sector regulations, with two primary objectives: promoting credit growth and strengthening risk management. Regulatory measures - including adjustments to the Land Law and stricter oversight on credit regulations - are expected to enhance financial system stability. Additionally, while loan restructuring remains an important step in addressing non-performing loans (NPLs), the Government’s decision not to extend Circular 02/2023/TT-NHNN asserts a firm commitment to greater transparency and stronger asset quality management. 

Looking ahead, Vietnam’s banking sector holds strong growth potential in 2025 but also faces notable challenges. Sustaining credit expansion must go hand in hand with capital strengthening, credit risk management, and operational efficiency improvements. Net interest margins (NIM) are unlikely to see a significant rebound, while non-interest income, particularly from fee-based services, has been slow to recover, further pressuring banks to optimize costs and maintain profitability. 

In Conclusion 

With continued regulatory adjustments and economic recovery, Vietnam’s banking sector is expected to maintain relative stability in 2025. However, its long-term sustainability will depend on strengthening capital buffer, improving risk management, and enhancing operational efficiency. 

For further details:

• Analyst presentations at the event (Vietnamese version): HERE 

• Analyst presentations at the event (English version): HERE

--------------------------------------------------------------------- 

The "Vietnam Credit Spotlight 2025" Recap Series summarizes key insights from the conference, offering in-depth perspectives on economic outlook, credit ratings, banking systems, corporate performance, and capital markets. This series serves as a valuable resource for businesses and investors looking to shape their strategies in the evolving economic landscape.

_____________________________________________

About FiinRatings 
FiinRatings, a member of FiinGroup and technical partner of S&P Global Ratings, is a licensed credit rating agency under Vietnam’s Ministry of Finance. Our services include credit ratings, green bond verification, and independent evaluations (Second Party Opinion - SPO), catering to issuers, lenders, and investors across diverse sectors in Vietnam. 

FiinRatings’ SPO services provide independent evaluations of financial instruments, policy frameworks, or transactions aligned with principles set by global institutions like the International Capital Market Association (ICMA) and the Climate Bonds Initiative (CBI). Notably, FiinRatings is the first approved verifier for CBI Climate Bond Standards in Vietnam. 

« Go Back