According to a recent report by SSI Research, bank stocks have entered an attractive price range following a market correction. Specifically, after peaking at 1.84x in August 2025, the average P/B ratio of bank stocks in the study declined by 16.4% to 1.53x as of November 3, 2025, falling below the 5-year average of 1.65x.
During this correction, the trailing P/B ratios of STB, CTG, MBB, and HDB remained above their historical averages, while other banks saw significant declines. Additionally, the projected 2026 P/B ratio is estimated at 1.28x, reflecting an attractive valuation amid expectations of an 18% growth in pre-tax profit and a return on equity (ROE) of 18%.
SSI Research noted that the 9-month 2025 results of banks met expectations, reinforcing a positive outlook for Q4 2025 and 2026. The industry’s profit is forecasted to grow by approximately 15% in 2025 and further improve to 18% in 2026, driven by sustainable credit growth, enhanced asset quality, and a more stable net interest margin (NIM).
Commercial banks continued to outperform state-owned banks in credit growth, with rates of 4.5% and 4% quarter-on-quarter, respectively. Notable performers included VPB (+8.3%), TCB (+6.1%), ACB (+5.6%), and MBB (+5.5%).
Asset quality remained stable overall, with non-performing loans (NPLs) rising slightly by 1.5% quarter-on-quarter. Banks like ACB, VPB, CTG, and BID showed improvements, while STB, OCB, MBB, and HDB reported NPL increases. The system-wide NPL coverage ratio increased to 93.7%, and credit costs decreased to 1.13%. MBB’s NPL rise was attributed to renewable energy loans awaiting PPA contract restructuring with EVN, expected to be reclassified in Q4 2025.
NIMs declined marginally by 4 basis points to 3.14%, driven by higher loan-to-deposit ratios (LDR) and reduced bond investments. HDB saw a sharp drop due to lower commitment fees, while STB improved following interest income recognition from Phong Phú Industrial Park. Excluding one-offs, core NIM remained flat at 3.02%.
Deposit rates increased by 20–80 basis points in October 2025, primarily through short-term promotional programs. SSI anticipates stable NIMs in Q4 and a potential recovery in 2026 as asset yields improve.
Non-interest income surged in Q3 2025, driven by foreign exchange (+23% year-on-year) and securities. Record highs in the stock market boosted brokerage, margin lending, investment banking, and proprietary trading profits for bank-affiliated securities firms. Consequently, trading and investment securities income rose 33-fold year-on-year, significantly contributing to industry profit growth.
In summary, SSI Research views the banking sector as consolidating its foundation with a promising 2026 outlook, supported by stable profit growth, improved asset quality, attractive valuations, and strong contributions from non-interest segments.
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