Vietnamese Banks in H1 2025: Resilient Performance Under Threat from U.S. Tariffs

Vietnamese Banks in H1 2025: Resilient Performance Under Threat from U.S. Tariffs

Vietnam’s banking sector delivered a strong first-half performance in 2025, as revealed by financial statements from 27 listed banks. Robust profitability, stable asset quality, and rising fee-based income helped many institutions maintain impressive growth.

However, these achievements now face serious headwinds following the U.S. decision to impose a 20% tariff on Vietnamese exports. As a result, what looked like a year of solid momentum now appears more fragile going into the second half.

Solid Fundamentals: A Strong Start

The first six months of 2025 painted a largely positive picture for the Vietnamese banking industry. MB led the sector in return on equity (ROE) at 21%, followed closely by VietinBank and ACB with 20%, while Vietcombank and BIDVtrailed slightly at 17%¹. On return on assets (ROA), MB and Techcombank both posted 2.2%, indicating efficient use of capital. These results were supported by consistently low non-performing loan (NPL) ratios. Vietcombank recorded the lowest at 1%, with most others below 2%, highlighting controlled credit risk¹.

The banks’ cost structures remained lean, especially for those maintaining high CASA (Current Account Savings Account) ratios. MB reported a CASA ratio of 38%, followed by Vietcombank at 37%¹. These low-cost deposits enabled several banks to keep their cost of funds (COF) down: Vietcombank led again at just 2.2%, well below peers like VietinBank (3.0%) and Techcombank (3.3%)^1. Operating efficiency also improved, with VPBank achieving the lowest cost-to-income ratio (CIR) at 26%, followed closely by MB and VietinBank, both at 27%¹.

Non-interest income became an increasingly important revenue stream. Techcombank led the market with VND 3,900 billion in net fee income, while MB followed with VND 3,200 billion, marking a 37% increase year-over-year. Both banks showed improved ratios of fee income to total loans—1.1% for Techcombank and 0.7% for MB¹.

This trend reflects a structural shift in bank strategy amid declining Net Interest Margins (NIM). Most banks experienced NIM compression; MB saw only a modest 3-basis-point dip to 4.1%, while VPBank, despite maintaining the highest NIM at 5.6%, suffered a 6-basis-point decline¹.

The U.S. Tariff Shock: A New Threat Emerges

While internal indicators remained healthy, the external environment shifted sharply in July when the U.S. announced a 20% tariff on Vietnamese exports, and a 40% tariff on transshipped goods, especially those involving Chinese inputs. Although the 20% rate was less punitive than feared, it nonetheless introduces a major risk to Vietnam’s export-oriented economy and, by extension, its financial system².

Vietnamese exporters, particularly in electronics, apparel, and furniture, rely heavily on U.S. demand and imported components from China. The new tariffs will not only reduce competitiveness but also create uncertainty in trade compliance. Exporters are likely to face reduced orders, narrower profit margins, and delayed investment decisions. This in turn will affect banks through weaker credit demand, slower fee income growth, and potential asset quality deterioration³.

Banking Sector Implications: Hidden Vulnerabilities

The new tariff policy may have several repercussions on the banking sector. First: Credit demand could decline as export-oriented companies reassess or postpone borrowing. Banks such as ACB, Sacombank, and TPBank, which have retail and SME exposure to sectors like textiles and electronics, may feel the impact more acutely.

Second: While NPL ratios remained low in H1, the potential for deterioration is rising. If U.S. demand falters and inventory piles up, exporters could struggle to repay debts. Although larger banks with diversified portfolios, like MB, Vietcombank, and Techcombank, may absorb the shock better, smaller banks or those with geographic concentration in manufacturing zones could see sharper deterioration.

Third: Non-interest income could weaken. As trade volumes drop, revenue from letters of credit, guarantees, remittances, and foreign exchange transactions may decline. This will be particularly detrimental to banks like Techcombank and MB, which have actively expanded their fee-based services to offset falling NIMs.

Finally: The systemic liquidity picture could tighten. Although the State Bank of Vietnam has recently expanded credit growth quotas, the demand-side shock from trade disruption may leave credit room underutilized, or worse, misallocated to riskier borrowers under pressure⁴.

Policy and Strategic Response

To mitigate these risks, banks must adopt a multi-pronged strategy.

First: Risk models must be adjusted to incorporate trade exposure and tariff sensitivity at the sector level.

Second: Banks should promote client diversification in both geographically and product-wise to reduce reliance on U.S.-bound exports.

Third: Operational efficiency must be prioritized. Banks like MB, which already boasts a lean CIR and a high share of digital revenues, are better positioned to weather shocks. Digitally driven income offers a degree of insulation from macro volatility.

Fourth: Capital buffers must be preserved or strengthened. With growing uncertainty, prudent provisioning and capital conservation will be key to maintaining investor and depositor confidence.

Finally, broader government support is essential. Trade negotiations, investment in supporting industries, and targeted financial aid for affected exporters will help contain economic fallout. Policymakers must now coordinate closely with the banking system to avoid a potential feedback loop of economic contraction and financial instability⁵.

Conclusion: A Tale of Two Halves

In sum, Vietnam’s banks reported a strong H1 2025, backed by efficiency, profitability, and diversification. The top-performing institutions distinguished themselves through operational excellence, digital growth, and disciplined risk control. However, the external shock posed by the newly imposed U.S. tariffs introduces substantial uncertainty. The second half of 2025 may not mirror the first.

Banks that act now by recalibrating risk models, tightening asset quality controls, and reducing exposure to vulnerable sectors—will navigate the storm with greater resilience. But the warning signs are flashing: a deteriorating trade relationship with the U.S. could reshape the outlook for the entire banking sector.

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1. “Bối cảnh thị trường buộc các ngân hàng đẩy mạnh nguồn thu phí lãi,” VnEconomy, August 2025. https://vneconomy.vn/boi-canh-thi-truong-buoc-cac-ngan-hang-day-manh-nguon-thu-phi-lai.htm
2. “Vietnam July exports up 16%, industrial production up 8.5%,” Reuters, August 6, 2025. https://www.reuters.com/world/asia-pacific/vietnam-july-exports-up-16-yy-industrial-production-up-85-2025-08-06
3. “Trump’s Tariff Deal with Vietnam Raises Compliance Questions,” The Washington Post, July 2025. https://www.washingtonpost.com/world/2025/07/03/vietnam-us-trade-deal-china
4. “Credit room expanded by State Bank,” VietnamNews, July 2025. https://vietnamnews.vn/economy/1716528/nim-reduction-forces-banks-to-increase-non-interest-income-cut-costs.html
5. “Vietnam’s Strategic Response to U.S. Tariffs,” WTO Center, July 2025. https://wtocenter.vn/chuyen-de/28231-vietnam-us-trade-deal-2025-summary-impacts-and-strategic-responses