Vietnam Banks Face Higher Asset-Quality Pressure
TCBS says Vietnam’s listed banks face a more important asset-quality test in the second half of 2026 than the headline non-performing loan ratio suggests, with rising substandard loans, slower provisioning and a faster build-up in unpaid interest and fees all pointing to pressure ahead.
That matters for earnings and valuations because the sector’s reported bad-loan ratio can stay relatively contained even as problem assets accumulate beneath the surface. TCBS’ latest review of 27 listed banks shows the industry’s non-performing loan ratio at 2.01% at the end of the second quarter, only slightly below a year earlier but above 1.86% at the end of 2025, while total bad loans climbed to about 310 trillion dong from 132 trillion dong in the third quarter of 2022.
The more immediate warning sign, according to TCBS, is special mention loans, or group 2 loans overdue by 10 to 90 days. That ratio rose for a second straight quarter to 1.38% from 1.17% at the end of 2025, ending a 10-quarter decline. TCBS said some of that balance could migrate into bad loans over the next one to two quarters, lifting the sector NPL ratio modestly in the second half.
The report also shows the burden is increasingly concentrated. Four banks — Sacombank, BIDV, VPBank and VietinBank — held 50.5% of total bad debt among the 27 lenders, while Sacombank accounted for 77.7% of the sector’s year-on-year increase. Sacombank’s bad-loan ratio jumped 5.08 percentage points to 7.54%, the highest in the peer group, which TCBS said is consistent with legacy restructuring and related assets rather than purely newly formed credit stress.
Provisioning is the second risk. Loan-loss reserves rose 14.7% from a year earlier to 244.4 trillion dong at the end of June, but bad loans increased faster, at 16.1%, pushing the sector coverage ratio down to 78.8% from 82.9% at the end of 2025. TCBS said banks with high bad-loan ratios and low coverage may have to absorb higher credit costs in coming quarters, while lenders such as Vietcombank, Techcombank and others with stronger buffers have more room to support profits.
The third warning sign is accrued interest and fees. That item climbed 36.1% to 230.7 trillion dong, roughly twice the pace of credit growth, lifting the ratio of accrued interest and fees to loans to 1.5%, the highest level in six half-year periods. TCBS said that suggests some performing loans are already lagging on interest payments even if they have not yet been classified as bad debt.
For investors, the message is that bank earnings may be more vulnerable in the second half even if reported NPL ratios look stable. Shares of banks with high coverage and lower problem-asset buildup should be better insulated, while lenders with weak buffers, elevated group 2 loans or large legacy issues face greater pressure on provisioning and profitability.
The next catalyst is whether the rise in special mention loans turns into a broader NPL cycle by year-end, especially if credit growth slows and banks are forced to reserve more aggressively.
| Entity | Gains | Losses |
|---|---|---|
| Banks with high coverage | ▲Lower provision pressure | ▼Less room to reprice risk |
| Banks with weak buffers | ▲Faster reserve rebuild | ▼Margin and profit pressure |
| Sacombank | ▲Legacy cleanup progress | ▼Highest bad-loan concentration |
| Bank shareholders | ▲Stronger lenders protected | ▼High-risk lenders re-rated lower |