Summary
Vietnam's banking sector is navigating a pivotal transition as slowing GDP growth, a State Bank of Vietnam credit growth target, and rising non-performing loans test the resilience of the country's largest lenders. Institutions including BIDV, Vietcombank, VietinBank, Techcombank, and Vietnam International Bank are recalibrating their balance sheets against a backdrop of weak capital absorption, a strained real estate market, and capital adequacy ratios that trail regional peers in Indonesia, Malaysia, Thailand, and the Philippines.
Beyond the macro picture, front-end digitalisation is reshaping how Vietnamese banks compete. Mobile banking, e-KYC, QR code payments, and virtual assistants are becoming standard, while omnichannel platforms such as BIDV's iBank and revamped VietinBank and Techcombank apps signal a broader shift toward digital-first service delivery. Neobanking remains nascent compared with other APAC markets, and the absence of a dedicated digital-bank licensing framework is pushing challengers to partner with incumbents or operate as their units.
Four growth levers stand out for banks building best-in-class franchises: sustaining steady credit growth despite high interest rates and a weak property market, scaling digital-only banking propositions aimed at Vietnam's large unbanked and underbanked youth population, capturing the largely untapped Buy Now Pay Later opportunity, and generating fee income through open banking use cases spanning account aggregation, payments, lending, identity verification, and fraud prevention.
What will it take for Vietnamese banks to convert digital investment into best-in-class performance as credit conditions tighten heading into 2024?
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