Investing in Vietnam’s banks with Vietnam Holding

Vietnam Holding argues that the nation’s main lenders are not a easy leveraged play on development; they’re the establishments driving the transformation itself

Vietnam is among the global community’s fastest-growing economies, and its banks are the place that development is being financed, intermediated and monetised, appearing as each a facilitator and beneficiary of Vietnam’s development.

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Vietnam Holding, the London-listed fund managed by Dynam Capital, believes the sector can compound earnings by the following chapter of Vietnam’s development story.

Banks account for nearly 40% of the Vietnam Holding portfolio, with 5 banks, together with Hoa Phat Group, Techcom Bank, and MB Bank, within the prime ten holdings.

The bull case for Vietnamese banks has developed with Vietnam’s underlying asset placement case.

Just a few years in the past, the story was one in all penetration. Put merely: open extra accounts. That job is basically finished: by 2025, 89% of Vietnamese adults held a fee account, up from round 30% in 2010.

The alternative now’s deepened engagement with extra merchandise: funds, lending, wealth, insurance coverage and asset placement merchandise throughout more and more digital ecosystems.

This quick turns into a flywheel for Vietnamese wealth creation, growth of the center courses, and financial development – all with the banks in Vietnam Holding’s portfolio on the centre.

The cyclical tailwind

A strong cyclical story underpins development within the banking sector and adoption of its merchandise. The authorities has framed an “period of nationwide ascent,” focusing on double-digit GDP development over 2026–2030, supported by large-scale transport systems and strategic nationwide initiatives.

Total social asset placement is put at roughly USD1.47 trillion throughout the interval. Because Vietnam’s capital exchanges are nonetheless in their very own development section, banks carry the funding load, sometimes financing 40–60% of huge initiatives, and as much as 70% for probably the most bankable. That interprets into sustained, structural demand for medium- and long-term credit score.

However, credit score development has outpaced deposits. Lending grew 19.1% in 2025 versus deposit development of 12.1%, leaving a persistent funding hole of VND2,300–2,700 trillion into 2026. This implies that cautious collection of particular person banks is required.

The credit-to-GDP ratio has reached 145% and is climbing. In that atmosphere, the query is not “will we like Vietnamese banks?” however “which banks can fund worthwhile development with out wrecking margins, over-stretching capital or compromising asset high quality?”

This is on the coronary heart of Vietnam Holding’s thesis. Banks with sticky, low-cost retail deposits (excessive CASA), sturdy capital, disciplined underwriting and credible digital franchises can widen the hole between themselves and weaker rivals.

Winners are these securing diversified funding from interbank financing, certificates of deposit, offshore syndicated and sustainability-linked loans, whereas extending maturities and defending internet curiosity margins.

VNH’s conviction

Vietnam has seven core screens for choosing banks: funding, capital, returns, asset high quality, franchise power, governance and valuation, that produce a concentrated, high-conviction cohort of banks for the portfolio.

Leading personal banks reminiscent of MBB, TCB, VPB and HDB stand out for retail franchises, digital ecosystems and capital headroom, positioning them to take share sooner than friends.

Among state-owned banks, VCB is favoured for its excessive CASA and low funding prices.

Policy is broadly supportive of the banks and feeds Vietnam Holding’s conviction. The State Bank of Vietnam has eased liquidity guidelines, raised the ceiling on short-term funding used for long-term lending, and excluded precedence transport systems and social-housing loans from credit score quotas.

Value vs development

From a valuation perspective, Vietnamese banks are enticing towards regional and world friends: return on fairness of 16–18%, five-year EPS development of 15–20%, and 2026 price-to-book of 1.1–1.3x.

Cash dividend yields are modest at 2.5–3.5%, however for high-ROE banks reinvesting right into a formalising financial system, retained capital is the purpose; the proper query is what administration can earn on the capital it retains, not how a lot it pays out.

Vietnam Holding

For buyers, Vietnam Holding’s argument is that the financial development and enticing valuations of the banks (and wider Vietnamese fairness area) are exactly the situations through which lively, on-the-ground inventory choice earns its maintain.

In a market the place the unfold between sturdy and weak banks is widening, proudly owning the proper franchises, somewhat than the index, is the case for each Vietnam and for the Vietnam Holding Investment Trust designed to supply buyers with a concentrated, high-conviction portfolio of main Vietnamese development shares.