Vietcombank: How a State Bank Became Vietnam’s Most Valuable Company

Vietcombank is the clearest proof that in Vietnam a bank can be both an instrument of the state and the stock market’s most valuable company at the same time. It was never designed to be a commercial bank; it was carved out of the central bank to handle foreign exchange for a planned economy at war. Six decades later it lends to Samsung’s suppliers, clears a large share of the country’s trade finance, pays the government a dividend in shares, and trades at a valuation premium that no other Vietnamese lender can match. This article explains how a state agency became a listed institution, why it earns more than banks with larger balance sheets, what the government asks of it in return, and where the model could break. It is part of the Vietnam Company Stories hub.

Why was Vietcombank created, and what did it do before it was a bank?

It was created on 1 April 1963 as the Bank for Foreign Trade of Vietnam, spun out of the foreign-exchange department of the State Bank, to be the only institution in North Vietnam allowed to hold foreign currency, settle trade and deal with foreign banks. For its first three decades it was less a bank than a state monopoly on hard currency.

That monopoly built things a start-up bank cannot buy. During the war it managed aid flows and payments through a network of correspondent banks in the socialist bloc and, discreetly, beyond it. After 1975 it inherited the foreign-exchange business of the South. When the Đổi Mới reforms of 1986 began to open the economy, every exporter, importer and foreign investor that needed a letter of credit, a dollar account or a remittance channel went through Vietcombank because there was nowhere else to go.

The 1990 banking ordinances turned the old monobank system into a two-tier structure with a central bank and state-owned commercial banks. Vietcombank became one of four large state lenders, alongside BIDV (infrastructure), VietinBank (industry and commerce) and Agribank (agriculture), each named for the sector it was meant to serve. The others were built around domestic lending; Vietcombank was built around the border. That difference still shows up in its balance sheet: it remains the leading bank in trade finance, foreign-exchange trading and inward remittances, which are low-risk, fee-heavy businesses that other banks have spent twenty years trying to replicate.

How did equitisation turn a state agency into a listed company?

Through a December 2007 initial public offering that was, at the time, the largest in Vietnam’s history, followed by a listing on the Ho Chi Minh Stock Exchange in June 2009 and the sale of a 15% stake to Japan’s Mizuho in 2011. The state kept control at every step.

The IPO was an auction. The government offered about 6.5% of the bank to the public at a starting price of VND 100,000 per share; bids averaged a little above VND 107,000 and the sale raised on the order of VND 10.5 trillion, roughly USD 650 million at the exchange rate of the day. It was oversubscribed, but the timing was poor: the VN-Index had peaked in March 2007 and the global financial crisis arrived within months. Investors who bought at the auction waited years to recover their money, and the bank traded below its IPO price for a long stretch after listing.

The strategic sale was slower and more consequential. Vietnam wanted a foreign partner that would bring risk management and technology without taking control, and the 30% cap on foreign ownership of banks made that a natural fit for a minority investor. Mizuho paid roughly USD 567 million for 15% in September 2011, the largest bank deal in the country up to that point, and has kept the stake and a board seat ever since. In January 2019 a private placement to Singapore’s GIC and to Mizuho brought in another USD 265 million or so. The resulting structure — State Bank about 74.8%, Mizuho 15%, GIC and the public the rest — has barely moved since, which is why a long-promised private placement of a further 6.5% has become one of the most anticipated and most delayed transactions in Vietnamese banking.

Equitisation changed the incentives inside the bank more than the ownership figures suggest. Once a share price existed, the leadership could be judged on return on equity and provisioning discipline rather than on how much it lent to state enterprises. Vietcombank was the first Vietnamese bank to fully provision and buy back all the bad loans it had parked with the state asset manager VAMC, in 2016, and it did so partly because the market rewarded it for doing so. The mechanics of that clean-up are covered in our companion piece on VAMC and the zero-dong banks.

Why does Vietcombank earn more than banks with bigger balance sheets?

Because its cost of funds is the lowest in the system, its loan losses are the lowest among large lenders, and its fee businesses were inherited rather than bought. Pre-tax profit reached roughly VND 42 trillion in 2024, about USD 1.65 billion, the highest of any Vietnamese bank, on a balance sheet that is not the largest.

Funding is the foundation. State enterprises, the treasury, exporters and importers all keep operating balances at Vietcombank, and a large share of those balances earn little or no interest. The bank’s current-account-and-savings (CASA) ratio has sat in the mid-30% range for years without the fee waivers and marketing spend that private banks such as Techcombank used to win their deposits. Add foreign-currency flows from trade settlement and remittances, and Vietcombank routinely funds itself one to two percentage points more cheaply than a mid-sized private competitor. In a business where the spread between deposit and lending rates is the product, that gap is the profit.

The asset side is deliberately dull. Vietcombank’s non-performing loan ratio has stayed around 1% while the system average, including loans parked at VAMC and restructured debt, has been several times higher. Its loan-loss coverage ratio — provisions divided by bad loans — climbed past 400% in 2022, an extraordinary figure by any international standard, before easing back toward the 200% range as it absorbed the strains of 2023 and 2024. That cushion is why the bank could cut lending rates to support the economy during the pandemic and again in 2023 without reporting a loss quarter.

The return on equity, around 20% in good years, comes with a cost-to-income ratio in the low 30s, among the leanest of the large banks. Vietcombank is not a technology leader and its mobile app arrived later than the private banks’ did, but scale and inherited franchises have let it catch up without the spending that a challenger would need.

How does Vietcombank balance shareholders against the state?

By accepting that the state comes first and structuring the shareholder return around that fact. Dividends are paid mostly in shares because the government prefers to keep its capital in the bank, policy rate cuts are executed without complaint, and capital raising moves at the speed of ministerial approval.

The cost of being a policy bank is visible in the income statement in specific years. In 2020 and 2021 Vietcombank cut lending rates for pandemic-hit borrowers repeatedly, forgoing several trillion dong of interest income by its own account. In 2023, when the State Bank pushed the whole system to lower borrowing costs, the big four moved first and furthest. A private bank would have had to justify that to its board; Vietcombank’s board is, in effect, the State Bank.

Capital is the sharper constraint. A bank growing lending at 12–15% a year needs more equity every year, and Vietcombank cannot simply issue shares because that would dilute the state below the threshold it wants to keep. The workaround has been to capitalise retained earnings: chartered capital rose from about VND 47 trillion in 2021 to roughly VND 83.6 trillion after a large stock dividend in 2025, with further stock dividends approved. Each of those steps needed sign-off from the State Bank and the Ministry of Finance, and each took longer than the bank wanted. The proposed 6.5% private placement to outside investors has been on the agenda since 2019 and has slipped repeatedly on valuation and approval grounds.

Leadership follows the same logic. Chairmen and chief executives are party officials as much as bankers, and they rotate. Nghiêm Xuân Thành left the chairmanship in 2021 to become provincial party secretary of Hậu Giang; his successor Phạm Quang Dũng moved to the State Bank as a deputy governor in 2024, with Nguyễn Thanh Tùng taking the chair and Lê Quang Vinh subsequently taking over as chief executive. Continuity of strategy comes from the institution and the ministry, not from any one executive, which is a strength in ordinary times and an unknown in extraordinary ones.

What happened when Vietcombank was told to take over the Construction Bank?

On 17 October 2024 the State Bank transferred the failed Vietnam Construction Bank (CBBank) to Vietcombank at no cost, ending nine years in which the smaller bank had sat in special administration. Vietcombank renamed it VCBNeo and was given a package of regulatory concessions in return for absorbing its losses.

CBBank was one of the three “zero-dong banks” the State Bank nationalised in 2015 after their capital had been wiped out by fraud. Its former chairman Phạm Công Danh was sentenced to 30 years for causing losses that ran to trillions of dong. Vietcombank had been assigned to provide management support to the bank since 2015, so the 2024 transfer formalised a relationship that already existed and turned a costly obligation into a wholly owned subsidiary.

The concessions matter because they show how the state pays its favoured banks. Under the compulsory-transfer framework in the 2024 Law on Credit Institutions, the acquiring bank may receive zero-interest refinancing from the State Bank, extra credit-growth room above its normal quota, exemption from consolidating the subsidiary’s losses into its capital-adequacy ratio, and freedom to keep the subsidiary as a separate legal entity or fold it in later. On the same day, MB received OceanBank under similar terms; VPBank and HDBank took GPBank and DongA Bank in early 2025. How much credit room a bank gets each year under the State Bank’s quota system is, for a lender of Vietcombank’s size, worth billions of dong in interest income, so the rescue is not simply charity.

For shareholders the calculation is uncertain. VCBNeo carries accumulated losses that will take years of subsidised funding to work off, and its brand is damaged. Management has framed it as a digital-bank experiment, a way to reach customers the parent would not otherwise serve. Analysts have generally treated the deal as neutral to mildly positive because of the concessions, but they cannot see inside VCBNeo’s loan book any more than the public can.

What are the risks in the Vietcombank model?

Concentration, opacity and dependence on policy. The bank is exposed to the state on both sides of its balance sheet, its leadership can be reassigned at short notice, its free float is small, and the foreign-ownership limit caps the pool of buyers who could support the share price in a sell-off.

The first risk is credit concentration in ways the reported numbers do not capture. Vietcombank lends heavily to large state enterprises, to the export supply chain and, through mortgages and developer loans, to real estate. The 2022–2023 property downturn that pushed Novaland into distress was survivable for Vietcombank because its developer exposure was modest, but the scale of its balance sheet means that a systemic real-estate shock — the kind that emerged from the Vạn Thịnh Phát and SCB affair — would reach it eventually through customers, collateral values and the deposit market.

The second is governance. The anti-corruption campaign that has run since 2016 has reached the top of several state enterprises and at least one former State Bank deputy governor. Vietcombank has not been implicated, but the mechanism through which its leaders are appointed and rotated means it cannot fully insulate itself from politics. The third is the structural mismatch between growth and capital: as long as the state refuses dilution and the market waits for a placement that keeps slipping, the bank grows by retaining earnings, which caps how fast it can expand and pushes it toward stock rather than cash dividends.

Finally there is the share register itself. With the state at nearly 75%, Mizuho at 15% and foreign investors close to the 30% ceiling, the shares that actually trade are a small fraction of the total. That thin float has helped the valuation on the way up and could hurt it on the way down, a dynamic that also complicates Vietnam’s efforts to secure an emerging-market upgrade in which Vietcombank would be the largest single index weight.

How does Vietcombank compare with the private challengers?

It is bigger, safer and slower. Techcombank, VPBank, MB and ACB have higher net interest margins, faster digital adoption and more aggressive retail strategies; Vietcombank has cheaper deposits, a wider trade-finance franchise and a state shareholder that will not let it fail. The market prices those differences explicitly.

Techcombank built the highest CASA ratio in the country by abolishing transfer fees in 2016 and targeting affluent customers; Vietcombank got a comparable ratio from state and corporate balances it did not have to win. MB earns a premium from its military-linked customer base; VPBank took on consumer-finance risk through FE Credit and paid for it in 2022–2023. Vietcombank has never needed to take those bets, which is why its profit growth has been steadier than any of theirs and why its shares command the higher multiple.

The private banks are catching up on scale. Techcombank’s pre-tax profit crossed VND 27 trillion in 2024 and VPBank’s consolidated balance sheet is approaching the size of the smaller state banks. Whether they close the gap in valuation depends on whether investors start to see them as systemically important enough to be protected, which is, in the end, the question every Vietnamese bank investor is really asking.

What does the Vietcombank story mean for founders, investors and operators?

That the most valuable institution in Vietnam is the one that combines a state franchise with market discipline, and that both halves are necessary. Founders should understand which bank wants their business, investors should price policy risk explicitly, and operators should treat Vietcombank as the settlement rail of the export economy.

For founders and CFOs the lesson is about fit. Vietcombank lends to exporters, to established corporates and to borrowers with hard collateral; it is the natural bank for a manufacturer selling to foreign buyers who need letters of credit and hedging, and it is a poor fit for an early-stage company with no assets. A start-up will get a faster answer from a private bank or from an ecosystem lender such as Techcombank, but a company that has grown into the export supply chain will find Vietcombank’s trade-finance pricing hard to beat. Knowing where you sit on that spectrum saves months.

For investors, Vietcombank is the closest thing Vietnam offers to a proxy for the whole economy: it is a play on trade, on the state’s willingness to keep its favourite institutions strong and on the eventual stock-market upgrade. The price of that exposure is a premium multiple and a set of risks that are political rather than financial. Comparing it with Vinamilk, the other state asset that investors have historically been willing to pay up for, shows the pattern: the market rewards state companies that behave like private ones, and punishes them the moment they stop.

For operators the takeaway is more practical. Vietcombank’s dominance in trade settlement means that pricing, documentation standards and processing times at Vietcombank set the norm that suppliers, customs brokers and logistics providers work around. A finance team that understands how Vietcombank handles a letter of credit, a foreign-currency account or a remittance can negotiate better with everyone else.

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