Our view: Positive management commentary regarding strong credit demand from the corporate segment, where VCB holds a dominant market position, and a resilient NIM outlook in H2 2026 further support our bullish thesis that VCB's earnings growth will accelerate in 2026-27F. Given the bank’s best-in-class COF and asset quality, we continue to view VCB as a top choice for investors seeking high-quality growth with low-risk exposure to Vietnam's banking sector.
Key takeaways
1. Macro outlook
- The trade balance swung to a deficit of USD16.7bn in H1 2026, driven mainly by higher oil and semiconductor import costs and front-loading/inventory stocking in AI-related sectors (electronics, components); VCB expects the trade position to improve in H2.
- VCB forecasts full-year 2026 CPI of +4.47% and core CPI of +4.31%, within the National Assembly's target, though upside risks remain from accelerated public investment, robust import demand, and price adjustments for State-managed services (healthcare, education) plus the July base salary hike.
- The exchange rate stabilized in May-June after easing sharply in April, but VCB expects continued pressure in H2 from import demand and potential US Federal Reserve policy shifts.
- System liquidity saw periodic stress around the beginning of the month and end. VCB expects deposit rates to stay flat-to-up in H2 given (1) strong credit demand for infrastructure projects, (2) deposit growth lagging credit growth, and (3) an elevated sector LDR.
- Real estate faced headwinds in H1 (tighter financial conditions, elevated rates and capital requirements, falling prices, sluggish transactions -12% YoY, rising inventory; floating mortgage rates of 13-15%), but VCB sees structural support from strong macro fundamentals, infrastructure acceleration, and improving market transparency (owner-occupiers made up 66% of apartment transactions).
- Per VCB, large-scale infrastructure projects will be funded primarily via accelerated public investment (streamlined administrative procedures, consolidating fragmented projects into key mega-projects, redeploying idle State Treasury funds into commercial bank term deposits) alongside efforts to attract FDI/private equity into infrastructure with predictable cash flows (seaports, industrial parks, logistics, renewable energy) and concessional loans from multilateral institutions (WB, ADB, AIIB) and climate transition funds.
2. Credit
- Management reiterated VCB is prioritizing credit quality and portfolio optimization over maximizing headline growth, which explains VCB's slower H1 2026 pace (~5%) relative to some private peers.
- H1 2026 credit growth by segment:
+ Corporate loans +8% (51% of total loans), driven by FDI +16% (22% of corporate book) with growth focused on sectors such as electronics, steel, animal feed, textiles, power, and real estate. For large corp and mid corp (75% of the corporate book), credit growth was 6% YTD, with loan demand increasingly shifting toward medium- and long-term financing, driven by steel, energy, power, telecom, and aviation. Much of the scheduled corporate disbursement is back-end loaded to H2.
+ Retail loans +2.3% (43% of total loans), primarily supported by mortgages (42% of the retail book) and consumption loans (23% of the retail book). Mortgage growth was somewhat subdued in Q2. Notably, business loans (33% of the retail book) were down ~9% amid ongoing market headwinds and lower demand.
- 2026 sector focus: electronics/computer/medical equipment manufacturing; mechanical & manufacturing industries; power/energy generation, transmission & distribution; and transport-support infrastructure (warehouses, bridges, ports, roads).
- VCB is financing 1 of the 18 Government-designated key national infrastructure projects exempt from the credit quota - Phu Quoc Airport (linked to APEC 2027) - with FX-denominated project revenue expected to aid debt repayment and lower funding costs; management is evaluating additional opportunities.
- On retail strategy, management noted mortgage-led retail growth has slowed alongside the real estate market, but plans to expand the retail/SME product suite (cash-flow- and value-chain-based SME lending, lending to payment-acceptance merchants, private banking/wealth management for the mass-affluent segment).
3. Funding
- Regulated LDR was around 80% at end-Q2 (vs the 85% cap), supported by accelerated deposit growth in the quarter.
- Funding initiatives for H2 2026: growing CASA/low-cost and FX deposits; issuing CDs as needed (currently ~7.5% for 6-month tenors, +50 bps vs April/May, still 100-150 bps below peers); expanding medium/long-term funding via domestic and offshore bond issuance (a USD bond issuance is in the pipeline); a planned Tier 2 bond issuance of up to VND10tn; and aligning the funding plan with the disbursement schedule.
4. NIM
- Management emphasized that the NIM recovery is increasingly driven by portfolio optimization (the shift to medium/long-term loans) rather than interest rate movements, which gives greater visibility on the sustainability of the improvement, noting some lag before the mix shift is fully reflected in interest income.
- For H2 2026, management expects NIM to hold broadly around the current level: rising lending rates should be a modest tailwind, partly offset by rising deposit rates/COF. Continued shift to longer-tenor loans, diversified funding, COF discipline, and balance-sheet optimization via a higher LDR are the key levers.
5. Asset quality
- Retail NPL ratio 0.8% (+10 bps QoQ). Corporate NPL ratio 1.2% (-10 bps QoQ). SME NPL ratio 1.1% (~flat QoQ).
- Management sees no signs of deterioration across segments.
- FY26 provision guidance is unchanged at VND3-4tn.
- Notably, the reversal of the provision related to the Q4 2025 restructured corporate bond (energy-sector customer) - previously flagged as likely by Q2 - has not yet occurred. Management said the underlying credit is “in good shape” but will only reverse the provision once fully confident the customer has completed its recovery/probation period, keeping a prudent stance.
- FY26 bad debt recovery target is ~VND3tn.
6. Capital
- CAR stood at ~11.6% at end-Q2.
- The 6.5% private placement remains in the investor outreach phase, following the previously approved plan on target investors, deal size, and pricing mechanism.
- VCB also plans a stock dividend to boost charter capital, currently pending regulatory approval.
7. Other matters
- In Q2 2026, VCB recognized a one-off asset revaluation gain of VND3tn.
- FY26 guidance: FX income and fee income are both expected to grow 5-10% YoY.
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