Data from VietstockFinance reveals that the average net interest margin (NIM) of 27 banks in Q3/2025 stood at 2.91%, a decline from 2.98% in Q2 and 3.09% in Q1. Notably, 20 out of these 27 banks experienced a further drop in NIM compared to the previous quarter.
VPBank led with the highest NIM at 5.36%, followed by HDBank (HDB, 4.82%), MB (MBB, 4.03%), Kienlongbank (KLB, 3.97%), and Techcombank (TCB, 3.66%).
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Q3/2025 NIM of banks
Source: VietstockFinance
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Thinning NIM: A Long-Term Trend
Assoc. Prof. Dr. Nguyễn Hữu Huân – Senior Lecturer, University of Economics Ho Chi Minh City – asserts that the declining NIM trend is undeniably long-term and will become more pronounced in the future. Intensifying competition among banks and the imperative to support the economy render maintaining historically high NIM levels unsustainable.
However, this reduction may not be entirely reactive, with banks compelled by market forces to lower NIM. Instead, it could be a strategic, proactive decision driven by individual bank policies.
Banks are willingly accepting thinner margins to enhance competitiveness and maintain lower lending rates. This approach aims to attract new customers, retain existing ones, and ultimately expand market share and scale.
The foundation for this proactive NIM reduction lies in successfully lowered operating costs (CIR). Banks are engaged in a fierce digital transformation race, yielding improved user experiences and optimized operations. This has significantly reduced operating expenses, as evidenced by the closure of inefficient physical branches and their replacement with automated platforms and digital banking apps.
These substantial cuts in fixed and operational costs have created crucial financial flexibility. The savings are used to offset the reduced NIM, effectively trading lower profit margins per unit of capital for operational efficiency and customer growth.
Future success will hinge not just on securing cheap capital, but on achieving the leanest operational structure. Banks leading in digital transformation, minimizing CIR, and thereby sustaining lower NIMs to offer competitive lending rates will hold a significant market advantage.
Meanwhile, Mr. Nguyễn Quang Huy – CEO of Finance and Banking Department, Nguyen Trai University, views the Q3 NIM decline as a normal year-end credit cycle phenomenon, not a sign of severe weakness.
The primary cause is increased funding costs due to seasonal deposit rate adjustments, while lending rates remain constrained by economic recovery policies. A declining CASA ratio has also elevated average funding costs. Faster credit growth relative to deposits (reflected in a near 94% LDR) has temporarily compressed net interest margins.
Despite lower NIM, bank profitability remains stable due to robust loan growth, expanded service income, and controlled operating costs. Large banks with access to cheap capital, digital payment ecosystems, and diversified retail portfolios are well-positioned to absorb NIM declines.
In Q4, NIM is expected to stabilize and potentially improve slightly as funding pressures ease, credit enters peak season, and income from services, bonds, and financial investments rises. Portfolio optimization, increased retail and SME lending, and cost control will further support margins.
Overall, the Q3 NIM decline is a technical adjustment during strong credit growth, reflecting the system’s rebalancing of profit, safety, and sustainability rather than a risk indicator. The outlook for Q4 and early 2026 remains positive, with stable profits, improved capital efficiency, and enhanced asset quality.
– 10:00 17/11/2025
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