Banks are in the peak of capital increase, are king stocks still attractive?

2025 is considered the peak year for increasing equity capital in the banking industry. Photo: Duc Thanh

More than 33,000 billion VND in capital increase by 2025

Since the beginning of the year, a series of banks have massively increased capital through issuing shares to pay dividends. According to the dividend plan approved by the General Meeting of Shareholders, many large banks will continue to increase capital through issuing shares to pay dividends, for example, BIDV will pay a 27% dividend, VietinBank will pay a 44.6% dividend...

Recently, HDBank's Board of Directors approved an additional capital increase of up to VND3,493 billion from issuing shares to convert convertible bonds, raising charter capital to a maximum of VND38,594 billion.

Ms. Do Hong Van, Head of Data Analysis Department, Financial Information Services Division (FiinGroup), said that 2025 could be the peak year for increasing equity capital in the banking industry, with the total value of increased capital expected to reach VND33,000 billion, exceeding previous years.

The main goal of banks is to strengthen capital buffers, meeting requirements (Capital Safety Ratio - CAR, loan/total deposit ratio - LDR, short-term capital ratio for medium and long-term loans), in the context of credit growth faster than mobilization, the industry-wide LDR has reached 108.5%.

Currently, the capital adequacy ratio of Vietnamese banks is low compared to the region, while the bad debt coverage ratio is at the bottom (80.3%) compared to the peak in the first quarter of 2022 (149.2%), showing a rather low ability to withstand credit risks.

Dr. Le Duy Binh, Director of Economica Vietnam (an organization operating in the fields of development consulting, economic research, policy analysis and project management) commented that the banks' massive capital increase is not only due to the pressure to ensure capital safety requirements, but also due to competitive pressure, credit growth pressure, technology investment pressure, etc. In the context of finding strategic partners for private offering is not easy (not to mention many banks are full of room), capital increase is mainly based on issuing shares to pay dividends.

Although it is positive for banks to use profits to increase capital, experts say that this form of capital increase does not bring new capital sources to banks. Commercial banks need to have a more sustainable capital increase strategy by issuing individual bonds to both improve financial health and have more large capital sources for investment and business.

Bank stocks are no longer cheap

In the first half of this year, the banking industry's profit growth rate was only half of the overall market's profit growth rate. The main reason for banks' thin profits is that NIM (Net Interest Margin) remained at a 5-year low after many quarters of contraction. In addition, provisioning costs increased sharply, with the second quarter of 2025 alone seeing banks' provisioning costs increase by 20% compared to the previous quarter and the highest increase in more than 3 years. The prospect of banks improving NIM in the near future is not great as the banking industry is under pressure to increase input interest rates, while output interest rates are very difficult to increase.

Moreover, the valuation of banking stocks is no longer cheap. According to FiinGroup, stocks with P/B (market price compared to book price) lower than the average (the industry's P/B is currently around 1.8x), high return on equity (ROE) and internal improvement prospects such as VIB, ACB, MBB can continue to attract attention. In addition, banking groups with weak foundations but are pushing to "clean up" their balance sheets and consolidate capital such as OCB, BVB are also worth paying attention to for the medium-term target. These efforts are expected to improve valuations when asset quality and profitability are more stable.

According to experts, banking stocks have increased sharply in recent times, so investors may focus on taking profits. At the same time, the group of king stocks will have strong differentiation in the coming time.

Stocks that have not increased strongly, with P/B lower than the average, have a lot of potential to continue to increase. In addition, investors should also pay attention to stocks associated with banks that have their own stories.

“Cash flow into bank stocks is expected to be more differentiated and selective. Groups with P/B lower than the average and with room for internal improvement will be more likely to attract cash flow,” said FiinGroup analysts.

In the current period, investors are recommended to pay attention to small and medium-sized banks with the potential to boost credit, with room to increase profits from debt collection, or banks with a prudent credit risk provisioning strategy, along with a trend of good credit cost control in recent quarters. In addition, banks that are about to IPO their subsidiaries, banks that intend to participate in gold exchanges, digital asset exchanges, etc. are also being noticed.

VWAS Forum 2025: “New Era, New Resilience”

The third Vietnam Financial Advisors Summit 2025 (VWAS 2025), organized by the Finance - Investment Newspaper on Thursday, September 25, 2025 at Pullman Hotel (Hanoi), will gather leading domestic and international experts, focusing on in-depth discussions on the impact of new institutions and new dynamics on the economy and financial markets. The forum will also analyze in detail the breakthrough growth points of traditional investment asset classes as well as opportunities with crypto assets.

The forum includes activities:

The main workshop with 2 sessions presenting and discussing the topics "Support for market resilience"; "Finding breakthroughs for asset classes".

Honoring typical financial products/services in 2025 in the fields of banking, insurance, real estate, fund management, securities and financial technology.

Details: www.vir.com.vn

Source: https://baodautu.vn/ngan-hang-cao-diem-tang-von-co-phieu-vua-co-con-hap-dan-d382483.html