Vietnam’s Securities Companies Spotlight: Resilient Funding Amidst Liquidity Divergence and Asset Quality Pressure

In this edition of the Vietnam Sector Spotlight Series, FiinRatings assesses 82 securities companies, covering the entirety of Vietnam’s active securities services industry with a few highlights.

In this edition of the Vietnam Sector Spotlight Series, FiinRatings assesses 82 securities companies, covering the entirety of Vietnam’s active securities services industry with a few highlights including: 

🔹 Business position: Post-Covid, smaller securities companies with less presence on the market has seen their business position further eroded to bank-backed securities companies, as banks seek to diversify their ecosystems amidst historically low NIM. Banks and other FIs’ penetration into the sector mostly takes the form of capital infusion to securities companies, such as credit lines and equity commitment from parent banks. We expect this trend to accelerate in the short-to-medium term if a market upgrade takes place.

🔹 Decline in brokerage revenue and disparities in margin lending yield: Tech-based solutions is expected to address the decline in brokerage revenue across the sector, driven by a lack of product differentiation. Significant disparities in margin lending yield points to bank-backed securities companies having a higher proportion of traditional deal loans within their lending portfolio.

🔹 Asset quality pressure: High lending provision across the sector is chiefly driven by non-bank-backed companies, largely from unconstrained growth in 2021 in tandem with a subsequent cooling from bond market defaults. Regarding bank-backed companies, rising bond exposure levels have exacerbated turnover time issues for their corporate bond portfolio. We attribute these developments to obligations from parent banks and their ecosystems imposed upon bank-backed companies and caution against premature optimism from lower provisioning levels.

🔹 Resilient funding profile and high differentiation in liquidity: Short-term wholesale funding became the main funding channel post-2021 to make the most effective use of cheap bank credit lines. Despite this, the sector has managed to keep its adjusted stable funding ratio well above 100%, with room for improvements as bond issuance recovers in 2025, though this is expected to benefit mainly top-tier companies. Differentiation is also exemplified in liquidity coverage, with the top 20 companies featuring significantly higher margin lending coverage ratio than their peers, thanks to healthy capital buffer and a robust liquid assets holding.

🔹 Key Watching Factors: A potential market upgrade in 2026 or earlier may have a board range of influence, mostly in terms of positive investor sentiment and foreign capital inflow for the whole market. Regardless, we still expect beneficiaries to be limited mainly, if not exclusively, to within the top 20 securities companies.

What do these hightlights mean for investors? Contact us for the most informed investment decisions! 

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Vietnam's Sector Spotlight Series: A comprehensive series by FiinRatings offering data-driven analysis and insights into key trends, major driving factors, financial & credit performance; and capital market activity review across Vietnam's key economic sectors.   

This report is available for free upon registration. We are happy to help investors invest with confidence in Vietnam’s capital market via our on-demand services including KYC, credit assessment, due diligence, and other transaction-related support works.

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