Foreign capital flows into many bank stocks

During the May 15 session, bank stocks continued to be in the spotlight. Stocks such as MBB, VPB, BID, STB, LPB, and SHB remained the primary focus of foreign capital inflows.

MBB led the group, with net foreign purchases reaching 25 million shares. SHB followed with 22 million shares traded, VPB with 8 million shares, STB with 1.5 million shares, VCB nearly 1 million shares, and ACB with 2 million shares matched through order matching.

According to market observers, foreign capital flowing into banking stocks reflects a shift toward defensive, safer investments amid ongoing global uncertainties. Another undeniable factor is the impressive earnings results reported by listed banks, which have caught the attention of investors.

In Q1 2025, MBB posted a pre-tax profit of VND 8,386 billion, up 45% year-over-year, despite its acquisition and restructuring of OceanBank. Notably, MBB recorded an extraordinary income of VND 1,003 billion from the recovery of previously written-off debts, up VND 740 billion compared to Q1 2024.

Other major banks also maintained stable growth. CTG recorded a profit of VND 6,823.2 billion, up 9.9%; HDB earned VND 5,355.2 billion, up 33%; and VPB reached VND 5,015 billion, up 20%, nearing its goal of USD 1 billion in annual profits. For ACB, while its core revenue reached VND 6,359 billion, the highlight was a 7.5% increase in non-interest income, raising its share of total revenue to 20% from 18% in the same period last year, thus diversifying income streams and reducing reliance on net interest income.

As for TCB, Q1 2025 profits reached VND 5,947.96 billion, down 4.39% year-over-year. Net interest income in Q1 2025 reached VND 8,305.39 billion, a 2.28% decline. However, credit growth increased by 18.67% year-over-year, and the bank's net interest margin (NIM) stood at 16.25%, supporting profit performance.

According to a State Bank of Vietnam (SBV) representative, as of March 31, 2025, total credit outstanding in the system reached VND 16.23 quadrillion, up 3.93% from the end of 2024, nearly triple the 1.34% growth during the same period last year.

Banks with the strongest credit growth included NCB (9.6%), VietA Bank (6.3%), LPB (6.2%), VPB (5.4%), and STB (4.6%).

Explaining the foreign capital inflows, Mr. Tran Hoang Son, Chief Strategy Officer of VPBankS Securities, noted that foreign investors have been returning to Southeast Asia and Asia more broadly over the past month. According to statistics from the past two sessions, foreign investors have resumed net buying on the Vietnamese stock market with values reaching into the trillions of dong, following a week of strong net inflows.

Amid unpredictable tariff developments, a sharp drop in the USD, and surging bond yields, investors have begun to view USD-denominated assets as less attractive. Notably, many foreign investors have found U.S. trade policies increasingly unpredictable, prompting them to reduce U.S. portfolio exposure. To date, the USD has fallen approximately 7.5% since the beginning of the year.

Conversely, currencies in other countries have shown signs of recovery. The Japanese yen, for instance, has appreciated nearly 10% since the beginning of the year. The South Korean won, British pound, and euro have all risen significantly, prompting investors to reallocate assets.

In addition, according to experts, part of the reason for the strong inflow into banking stocks is Decree 69/2025/NĐ-CP, recently issued by the Vietnamese government and effective from May 19, 2025, which adjusts foreign ownership limits in commercial banks undertaking mandatory restructuring of weak banks. Specifically, foreign ownership can now exceed 30% but must not surpass 49% of charter capital, except in banks where the State still holds over 50%.

In its latest report, ACB Securities (ACBS) commented that Decree 69/2025/NĐ-CP enables banks to issue shares to foreign investors to raise capital—particularly when additional funds are needed to support the restructuring of weak banks. For example, MBB plans to contribute up to VND 5,000 billion to MBV during the restructuring phase. Other banks are expected to make similar moves as part of the broader restructuring plan. Additionally, raising capital will help strengthen capital adequacy ratios (CAR), especially as restructuring banks are granted high annual credit growth limits of 20–30%.

Excluding Vietcombank—where SBV holds a 74% stake—the current foreign ownership ratios at the other three banks are MBB (22.3%), VPB (24.3%), and HDB (16.9%), all below the newly raised limit. Therefore, the expansion to a 49% cap is expected to significantly boost the stock prices of banks eligible under this regulation.

In the medium to long term, the 49% foreign ownership cap will allow banks to strategically raise capital from foreign investors. Currently, MBB's major shareholders include state-owned giants such as Viettel, playing a critical role in its business ecosystem. Meanwhile, VPB has SMBC as its strategic foreign shareholder, which also owns 50% of FE Credit.

Beyond positive impacts on capital and stock prices, ACBS also noted that this policy serves as a controlled trial for broader foreign ownership relaxation. It offers a basis to assess impacts on financial capacity, governance, and banking system stability.

Limiting the trial to three banks reduces the risk of financial and monetary instability in the event of sudden capital movements. Results from the pilot banks will provide practical data on foreign capital attraction, governance improvement, and weak bank restructuring—forming a foundation for future policy expansion, according to ACBS.