Foreign investment in the banking sector expands its horizons
In the vibrant Vietnamese stock market, bank stocks have emerged as significant magnets for foreign capital. With several major banks already maxing out their foreign ownership limits, the focus has shifted towards those with room for further investment.
Notable banks such as Techcombank, MB, VIB, HDBank, and ACB have reached their foreign ownership caps. However, this leaves opportunities for others to capitalise on. For instance, the stock of major lender Vietcombank, VCB, could potentially attract an estimated $99 million.
The outlook for bank stocks brightens in the second half of the year (H2), as they continue to trade below their book value. This situation has reversed course recently, with shares strengthening on Wednesday due to the strong increase of banking stocks.
One bank that has seen a significant tightening of its foreign ownership room is VPBank. From 5.4 per cent at the start of July, the foreign ownership room has narrowed to just 3.9 per cent currently. This shift has been accompanied by a net foreign inflow of $97 million for VPBank's VPB shares since early July.
The gains of large-cap stocks in the banking and real estate groups have bolstered shares on Friday, contributing to their overall upward trend.
Decree No. 69/2025/NĐ-CP, issued by the government on March 18, allows total foreign ownership in commercial banks undergoing mandatory restructuring to exceed the standard 30 per cent cap, up to a maximum of 49 per cent. This move is aimed at helping banks access new capital sources, particularly from foreign investors, while bolstering risk buffers and supporting high credit growth targets.
HDBank aims to seek shareholder approval for raising the maximum foreign ownership limit from 17.5% to 27%. BVBank, SeABank, LPBank, VPBank, VietinBank, OCB, and MSB have less than 5 per cent room remaining for foreign ownership.
On the other hand, banks such as Bac A Bank, PGBank, VietBank, Kien Long Bank, and Nam A Bank, have little to no foreign ownership used up. Among smaller banks, VietABank, Kien Long Bank, BVBank, and SaigonBank have announced plans to list shares on the Ho Chi Minh Stock Exchange between 2025 and 2026.
The bank with the largest remaining foreign capital participation in Vietnam is not explicitly named in the available search results; however, HDBank is highlighted as a leading multifunctional private commercial bank with strong financial performance in 2025, which may indicate significant foreign investment influence during this period.
Foreign investors have resumed net purchases across several emerging markets in Asia, including Vietnam's stock market. This renewed interest is expected to continue, potentially drawing over $1.1 billion in passive investment into seven Vietnamese stocks expected to be included in FTSE indices.
Decree No. 69 serves as a test case for expanding foreign ownership within a narrow group of banks, helping regulators gauge its impact on financial strength, governance quality, and overall system stability. This expanded ownership threshold applies within the approved restructuring timeframe and under an approved restructuring plan.
The deadline for converting convertible bonds issued to foreign investors in 2020 at HDBank has arrived. Three investors, Sky Capital Advisor Pte. Ltd., Clarendelle Investment Pte. Ltd., and Core Capital Pte. Ltd., are expected to hold over 2.04%, 3.68%, and 3.68% of shares respectively after conversion.
SHB currently offers the most headroom for foreign investors, with more than 24 per cent of its foreign ownership room open. As the landscape of foreign investment in Vietnamese bank stocks continues to evolve, it remains to be seen how this trend will shape the future of the Vietnamese banking sector.
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