This publication presents a comprehensive assessment of the Vietnamese banking sector’s performance in 2024 and early 2025, along with forward-looking insights into the structural trends shaping its outlook. As the sector enters 2025, it continues to operate under a challenging macro-financial environment, characterized by elevated credit risk, tightened liquidity conditions, and persistent margin pressure.  

Nonetheless, banks are actively pursuing strategic transformation, underpinned by regulatory reforms and new growth opportunities in digital finance, capital markets, and financial sector modernization.  

This comprehensive report also provides in-depth coverage across key dimensions such as credit and deposit performance, asset quality, liquidity, operational efficiency, capital strength, and strategic market trends. 

Key highlights from the report include:. 

• Credit growth reached a five-year high in 2024, supported by favorable rates and policy tailwinds. Growth remained solid into Q1 2025, though continued reliance on real estate lending highlights structural vulnerabilities. 

• Deposit growth remained subdued, lagging behind credit expansion and increasing liquidity strain. Banks diversified funding through market-based sources, pressuring margins and elevating funding costs. 

• NPL recognition surged after Circular 02 expired, while falling reserve coverage ratios signaled increasing exposure to credit risk amid economic uncertainty. 

• Profitability improved in 2024, driven by reduced operating costs and stronger income diversification. However, NIM compression persisted into 1Q2025, prompting banks to rely more heavily on non-interest income such as digital services and trading gains. 

• Capital adequacy improved, with the CAR reaching 12.63% by end-2024, reflecting sector-wide efforts to prepare for Basel III requirements. 

• Regulatory reforms are unlocking long-term potential, including the codification of Resolution 42 on bad debt resolution, the proposed removal of the state monopoly on gold trading, and Vietnam’s roadmap to establishing an International Financial Center (IFC). 

• Emerging growth areas such as P2P lending, fintech-bank partnerships, and private banking are reshaping the competitive landscape, particularly as sandbox policies and digital banking licenses take effect.