First-quarter 2026 financial statements released by banks showed a clear improvement in core income streams.

Combined net interest income at 28 listed banks reached $6.03 billion, up 17 per cent on-year. This continued to be the largest contributor to bank profits and a strong indication that credit growth is reclaiming its role as the banking sector’s primary growth engine.

A total of 23 out of 28 listed banks recorded growth in this category, reflecting a broad-based recovery rather than one concentrated among major lenders.

Credit remains the banking system’s largest source of profit

The figures suggest that the credit picture is improving not only for state-owned banks but also for joint-stock banks, which are benefiting from recovering capital demand across the economy.

Major state lender Vietcombank remained the leader in terms of net interest income, posting $706 million, up 29 per cent on-year. Meanwhile, NCB drew attention with the strongest increase in the system, surging 57 per cent to $31.7 million, while BVB reported a 55 per cent rise to $31.4 million.

According to Le Hoai An, founder of Integrated Financial Solutions JSC and a certified banking analyst, net interest income remains the key profit pillar as Vietnam’s banking system is still heavily dependent on lending activities. When capital demand rebounds, bank profits tend to respond almost immediately.

An said that funding costs had become more stable, easing pressure on banks’ cost of capital and creating room for improvements in net interest margins. At the same time, recovering credit demand from manufacturing, trading and infrastructure companies, as well as retail and consumer lending segments, have played an important role in restoring growth momentum for net interest income.

“Although reducing dependence on credit is a necessary long-term direction, in the short term, lending remains the banking system’s largest profit driver. When credit growth recovers, profits improve almost immediately,” he said.

While credit continues as the sector’s ‘main pillar’, services emerged as the most notable bright spot among non-interest income streams in Q1.

Total service income at 28 banks reached $829 million, soaring 43 per cent on-year. As many as 20 banks posted growth in this segment, with several even reporting multiple-fold increases.

VIB delivered the strongest performance, with service income rising more than fivefold, followed by SHB at 3.9 times, NCB at 3.7 times, PGBank at 3.2 times, and ABBANK at 2.5 times.

Growth was largely driven by more effective monetisation of digital banking platforms, payment card fees, personal financial services, wealth management and bancassurance products.

After years of heavy investment in digital transformation, several banks are beginning to see clearer returns from fee-based income streams.

In contrast to the strong performance of services, investment securities business was no longer a ‘fertile ground’ in the quarter as financial markets experienced sharp volatility.

Several banks that had posted large gains in the same period last year, including MBB, SSB, VIB and PGB, reported losses from these operations this year.

The development reflects the reality that income from securities investments remains highly dependent on market movements and cannot yet be considered a sustainable profit foundation.

Still, several notable exceptions emerged. STB posted a profit of $3 million from investment securities, compared with only $40,000 a year earlier. LPB recorded profits of $3 million, while NAB and CTG also achieved multiple-fold growth.

Similarly, foreign exchange trading came under significant pressure as exchange rates fluctuated sharply during the period.

Total income from forex operations at 28 banks fell 11 per cent to $248 million, with many lenders shifting from profit to losses.

Exchange-rate volatility not only affected foreign currency trading activities but also increased pressure on funding costs, foreign exchange position management and market interest-rate expectations. Only a handful of banks, including OCB, LPB, SSB and VAB, managed to maintain positive growth in this segment.

According to senior banking expert Nguyen Tri Hieu, despite positive profit signals in Q1, exchange-rate pressure and funding costs in the second half of the year could make it more difficult to sustain the growth momentum seen earlier in the year.

“If global interest rates remain elevated, particularly if the US Federal Reserve delays rate cuts, pressure on exchange rates and domestic liquidity will increase. In that case, banks’ net interest margins could continue to face pressure, while profits from market-related businesses such as foreign exchange and securities trading may also struggle to maintain stability,” he said.

The biggest challenge facing banks in the forthcoming period is not only how to generate higher profits, but also how to achieve sustainable growth. That can only come from a more balanced income structure, in which credit continues to play a central role, but is no longer the sole pillar supporting the entire profit base.