Vietnam’s financial sector has become a dynamic part of the nation’s economy, but despite its rapid development, it remains relatively small. In 2023, the sector accounted for 4.09 percent of GDP, a notable decrease from 4.76 percent in 2022.
That said, over the last decade, banking, insurance, bonds, and stocks, have all seen significant growth. The expansion has been driven by increased demand for financial services among a growing middle class, enhanced regulatory frameworks, and greater access to technology such as mobile banking and online investment platforms.
However, this is still a sector with considerable room for development. For instance, Vietnam’s stock market, while growing, remains underutilized compared to other regional markets, with relatively low participation rates among retail investors. Similarly, the insurance market, though expanding, has yet to achieve deep penetration across the population. Other financial instruments like bonds and derivative markets are still in nascent stages, with limited volumes and a lack of diversity in products offered.
With this in mind, this article provides a broad overview of the financial service sector in Vietnam including banking, stocks, and bonds.
Vietnam’s financial sector rankings
Depending on the measures used, Vietnam tends to fall around the middle of most financial sector indexes.
Index of Economic Freedom (IEF)
On the Heritage Foundations 2023 Index of Economic Freedom Vietnam was ranked 72 in the world with a score of 61.8. This was an improvement of 1.2 points over 2022. Out of 100 points, on investment freedom and financial freedom, Vietnam received scores of 40 and 50 respectively.
IMF Financial Development Index
In 2020, Vietnam scored 38 out of a possible 100 on the IMF’s Financial Development Index. This put Vietnam in fourth place tied with the Philippines also on 38, and behind its ASEAN peers Singapore (71), Thailand (74), and Malaysia (73). The country scored best on ‘financial institutions efficiency’ and worst on ‘financial institutions access’.
Global Financial Centers Index
Ho Chi Minh City is Vietnam’s financial center. Most of Vietnam’s major trading firms are based in the city which is also home to the HCMC Stock Exchange.
In the Global Financial Centres Index 35, released in March 2024, Ho Chi Minh City managed to jump ahead 12 places gaining 46 points. This was up from coming second to last at number 120 in the Global Financial Centers Index 34 published in September of 2023.
Financial products in Vietnam
Stocks in Vietnam
In October, the total capitalisation of ordinary shares hit VND 7,019.70 trillion or US$280.79 billion, a 19 percent surge from the end of last year, equating to 9.1 percent of Vietnam’s 2023 GDP. Furthermore, Vietnam’s stock exchanges recorded 728 stocks and fund certificates, with an additional 878 stocks registered for trading on the Unlisted Public Companies platform or UPCom, according to data from the Ministry of Finance.
See also: Vietnam Securities Industry
Bonds in Vietnam
Bonds in Vietnam are traded on the Hanoi Stock Exchange (HNX). Corporate bonds in recent years have been a popular means of raising capital in Vietnam, however, over the past year or so it has been revealed that corporate bonds in several instances have been misused. This has created some challenges selling bonds and has led to bond market reforms (details below).
Banks in Vietnam
Banking in Vietnam is a huge industry though a large portion of Vietnam’s population remains unbanked–roughly 44 percent in 2022 according to the World Bank–however, this number is in the decline. Direct transfers have become increasingly common, particularly through individual QR codes. Wages are generally paid via direct deposit as well.
Savings accounts and term deposits are also popular investment vehicles. Deposits are partially guaranteed in Vietnam and this can make keeping money in the bank a safer option than stocks or bonds.
Insurance in Vietnam
Vietnam’s insurance sector has grown rapidly in recent years. In 2023, it reported gross written premiums in excess of US$9.5 billion up from US$9 billion in 2022. Insurance in a number of sectors is mandatory including for motor vehicle owners and businesses in the construction sector. Vietnam’s insurance industry is also a popular sector for foreign investment with at least 15 branches of foreign insurance firms in Vietnam as of the end of 2023, according to The Annual Report of Vietnam Insurance Market 2023.
Gold in Vietnam
Gold in Vietnam is also worth a mention in that it is a very popular investment vehicle relative to elsewhere in the world. This has come about after decades of economic uncertainty, a cultural affinity with gold, as well as prices that have been known to fluctuate widely. There are gold shops all over Vietnam here gold bars can be bought and sold easily–this has also given rise to speculation.
Key financial service providers
Banks
Vietnam’s banking sector is dominated by four state-owned banks dubbed the ‘Big Four’, however, these banks are the four most well-known but necessarily the biggest in terms of dollar value.
Vietcombank (Joint Stock Commercial Bank for Foreign Trade of Vietnam)
Vietcombank is one of the largest and most prestigious banks in Vietnam, offering a wide range of services, including retail banking, corporate banking, and international trade financing. It is a key player in both domestic and global financial markets.
BIDV (Bank for Investment and Development of Vietnam)
BIDV is a state-owned bank that focuses on corporate and investment banking. It is known for financing large infrastructure projects and supporting Vietnam’s economic development. The bank also offers comprehensive retail banking services.
VietinBank (Vietnam Joint Stock Commercial Bank for Industry and Trade)
VietinBank is a leading state-owned bank providing services to individuals, businesses, and government institutions. It specialises in trade financing, corporate banking, and partnerships with foreign investors.
Agribank (Vietnam Bank for Agriculture and Rural Development)
Agribank is Vietnam’s largest bank by assets, focusing on rural and agricultural development. It plays a crucial role in financing small-scale farmers, rural businesses, and agricultural infrastructure projects.
Techcombank (Vietnam Technological and Commercial Joint Stock Bank)
Techcombank is a leading private bank known for its digital banking innovations. It offers a wide range of services, including personal banking, corporate banking, and wealth management, catering to both individuals and businesses.
MB Bank (Military Commercial Joint Stock Bank)
Initially established to serve military personnel, MB Bank has grown into a full-service commercial bank. It provides retail banking, corporate banking, and investment services, with a focus on innovative digital solutions.
VPBank (Vietnam Prosperity Joint Stock Commercial Bank)
VPBank is a prominent private bank known for its focus on retail banking, SME financing, and consumer loans. It has a strong presence in digital banking and innovative financial products.
ACB (Asia Commercial Bank)
ACB is a private commercial bank with a strong retail focus. It provides a wide range of financial services, including personal loans, deposits, and wealth management, while being recognised for its customer-centric approach.
Sacombank (Saigon Thuong Tin Commercial Joint Stock Bank)
Sacombank is a major private bank that serves both retail and corporate clients. It is well-regarded for its extensive branch network and comprehensive offerings in trade finance and savings products.
SHB (Saigon-Hanoi Commercial Joint Stock Bank)
SHB is a growing private bank offering a mix of retail and corporate banking services. It is particularly known for its SME financing and partnerships with international financial institutions.
These banks represent the backbone of Vietnam’s financial system, playing critical roles in driving economic growth and supporting individuals, businesses, and industries across the country.
Securities firms
Vietnam has a number of securities firms. Some of the key players are:
SSI Securities Corporation (SSI)
SSI is one of Vietnam’s largest and most prestigious securities firms, offering a comprehensive range of services, including brokerage, investment advisory, and asset management. It has a strong reputation for innovation and market leadership.
VNDirect Securities Corporation
VNDirect is a prominent player in Vietnam’s securities market, known for its advanced trading platforms and investment research services. The company caters to both retail and institutional investors.
Ho Chi Minh City Securities Corporation (HSC)
HSC is a leading securities firm specializing in brokerage, corporate finance, and investment advisory. It is well-regarded for its professionalism and extensive client network.
Viet Capital Securities (VCSC)
VCSC is a full-service investment bank and securities firm, providing brokerage, research, and capital-raising solutions. It has established itself as a trusted partner for both domestic and international investors.
MB Securities (MBS)
MBS, a subsidiary of Military Bank, offers a wide range of securities services, including brokerage, portfolio management, and financial consulting. Its strong backing from the banking sector enhances its credibility.
BIDV Securities Company (BSC)
BSC is the securities arm of BIDV, one of Vietnam’s largest banks. It provides brokerage, investment advisory, and underwriting services, leveraging its parent bank’s extensive network.
VietinBank Securities (VietinBankSC)
As a subsidiary of VietinBank, VietinBankSC offers brokerage and investment banking services, focusing on corporate clients and institutional investors.
Techcom Securities (TCBS)
TCBS, part of Techcombank, is a fast-growing securities firm specializing in investment banking, wealth management, and structured products. It is known for its innovative financial solutions.
Agribank Securities (Agriseco)
Agriseco, affiliated with Agribank, offers brokerage, corporate finance, and advisory services. Its strong ties to the banking sector support its presence in the market.
KIS Vietnam Securities Corporation
KIS Vietnam is a subsidiary of South Korea’s KIS Financial Group. It provides a wide range of services, including brokerage, research, and corporate finance, with a focus on international clients.
These securities firms play a critical role in the development of Vietnam’s capital markets, supporting both individual and institutional investors and contributing to the country’s financial ecosystem.
Insurance companies
Vietnam’s insurance market is generally divided into two markets: life insurance and non-life insurance. The non-life insurance market is the smaller of the two. That said, there are a multitude of both foreign and domestic firms operating in this space.
Bao Viet Holdings
As Vietnam’s largest insurance company, Bao Viet Holdings provides a wide range of life and non-life insurance products. This state-owned enterprise is a market leader, serving individuals and businesses across the country.
PTI (Post and Telecommunication Insurance Corporation)
PTI is a top player in the non-life insurance market, offering motor, health, property, and travel insurance. It is known for its extensive distribution network and innovative digital services.
PVI (PetroVietnam Insurance Corporation)
PVI specializes in non-life insurance, particularly for the energy and petroleum sectors. It is a leader in providing industrial and commercial insurance solutions.
Bao Minh Insurance
Bao Minh is a key non-life insurer offering a broad range of products, including motor, property, health, and liability insurance. It has a strong presence in both retail and corporate segments.
VietinBank Insurance (VBI)
A subsidiary of VietinBank, VBI provides non-life insurance products, such as health, motor, and property insurance. It leverages VietinBank’s network to expand its customer base.
Manulife Vietnam
Manulife is a leading foreign-owned life insurance company, offering a wide range of products focused on savings, investment-linked insurance, and health protection. It is recognized for its strong digital transformation.
Prudential Vietnam
Prudential is one of the largest life insurers in Vietnam, providing comprehensive solutions for life, savings, and retirement planning. It focuses on customer-centric and innovative services.
AIA Vietnam
AIA Vietnam is a major life insurance provider known for its retirement, health, and savings products. It emphasizes customer experience and technology-driven services.
Generali Vietnam
Generali, an Italian insurance company, operates in Vietnam with a focus on life insurance and wealth management. It is known for its flexible and tailored insurance solutions.
Chubb Vietnam
Chubb offers both life and non-life insurance products, including property, casualty, and accident insurance. It serves individuals, SMEs, and large corporations with customized solutions.
FWD Vietnam
FWD is a fast-growing life insurer known for its innovative, customer-friendly products and digital-first approach. It aims to simplify insurance and make it more accessible.
Liberty Insurance Vietnam
Liberty specializes in non-life insurance, particularly motor, health, and property insurance. It focuses on personalized products and services for the retail market.
These insurance companies play a crucial role in Vietnam’s financial sector, offering diverse products to meet the growing needs of individuals and businesses while driving innovation and market expansion.
Foreign investment in Vietnam’s financial services sector
As of November 2024, Vietnam’s financial, banking, and insurance activities sector had registered 6 new projects with US$122.1 million in newly registered capital, reflecting a decrease in investment activity compared to previous months.
Regulations
Vietnam’s financial services sector is among the most heavily regulated sectors of Vietnam’s economy. It is, however, also the most lucrative. As a result, it is also one of the most heavily foreign-invested sectors in Vietnam, in terms of dollar value. Firms considering an investment in the financial services sector in Vietnam should, therefore, should be aware of the limits and
Broadly speaking, foreign ownership limits in the banking sector are between 5 to 20 percent, bonds are open to foreign investors, and there is no cap on ownership of securities firms, however, in general, foreign investors cannot own more than 49 percent of a company listed on the local bourse. That said, there are often additional regulatory requirements for foreign firms operating in the financial services sector in Vietnam.
Recent, noteworthy foreign investments
Sumitomo Mitsui Banking Corporation (SMBC)
In March 2023, Japan’s Sumitomo Mitsui Banking Corporation (SMBC) made a significant move in Vietnam’s financial sector by purchasing a 15 percent stake in VPBank, one of the country’s largest private banks. The deal, valued at VND 35.9 trillion (approximately US$1.5 billion), marked one of the biggest foreign investments in Vietnam’s banking industry to date.
This strategic acquisition allowed SMBC to strengthen its presence in Vietnam, a rapidly growing market with increasing demand for diversified banking services, while also enabling VPBank to expand its capital base and enhance its operations. The injection of foreign capital through this partnership is expected to support VPBank’s long-term goals of bolstering its lending capacity, particularly in areas such as retail banking and small and medium-sized enterprises (SMEs).
DB Insurance
Back in February 2023, it was announced that Korea’s DB Insurance had taken a 75 percent stake in Vietnam National Aviation Insurance (VNI). This was DB Insurance’s second big move in the Vietnam insurance market. The first was the purchase of a 37.32 percent stake in Post and Telecommunications Joint Stock Insurance Corporation back in 2015.
Challenges in Vietnam’s financial services sector
Controversies
As is common in emerging markets, the speed at which Vietnam’s financial sector has developed has given cover to nefarious actors that have taken advantage of low levels of financial literacy and a lack of understanding of a number of new financial products. Vietnam’s authorities have been working to isolate and stamp out these practices but as of writing there are still a lot of challenges facing the industry.
Bonds
Vietnam’s bond market has been the centre of a major scandal over the past two years after it was revealed that funds raised from bonds were being misused. Investors discovered that the proceeds were not being applied towards the purposes they had been led to believe, sparking intense scrutiny of the market. This scandal culminated in a series of high-profile arrests, including corporate executives from large companies, which exposed widespread embezzlement amounting to billions of US dollars.
One of the most significant cases was that of Truong My Lan, the chairwoman of the major property developer Van Thinh Phat. Investigations revealed that she had misappropriated a staggering US$44 billion, a crime that sent shockwaves through Vietnam’s financial sector. The funds were allegedly embezzled through complex bond issuance schemes tied to her company.
Truong My Lan was sentenced to death for the aforementioned crimes in April 2024.
Insurance
Vietnam’s insurance sector has faced significant challenges over the past year, primarily due to widespread allegations that banks were misleading customers into purchasing insurance policies. Reports surfaced that bank customers, believing they were making traditional deposits, were instead being sold insurance policies without their full understanding or consent. This issue came to light as customers began realising that their money was not being held as savings but tied up in insurance products, which often carried different terms and conditions from what they had expected.
These allegations have severely impacted trust in both the banking and insurance sectors. Banks were accused of using high-pressure tactics and providing misleading information to borrowers, creating an atmosphere of mistrust between consumers and financial institutions. As a result, there has been increased scrutiny from regulatory bodies, prompting investigations and efforts to tighten oversight in the financial industry.
The controversy has led to calls for stricter regulations and transparency in the sale of insurance products.
Stocks
Vietnam’s stock market has faced significant controversy in 2024 due to allegations of market manipulation, particularly involving high-profile figures like Trinh Van Quyet, the former head of real estate giant FLC Group. Quyet is accused of orchestrating a scheme to artificially inflate the price of FLC’s stock by using family members and associates to buy large quantities of shares. This manipulation created a false sense of demand, driving up the stock price, which allowed Quyet to profit from selling shares at inflated prices. Reports indicate that he illegally netted around US$176.2 million through this scheme.
The case has had a profound impact on Vietnam’s stock market, raising concerns about transparency and fairness. In response, regulators have tightened oversight and implemented stricter rules to prevent similar incidents in the future. Quyet’s actions and subsequent arrest have led to broader efforts by Vietnamese authorities to clamp down on market manipulation and restore confidence in the financial markets.
Trinh Van Quyet was sentenced to 21 years for fraud and stock market manipulation in August 2024.
Vietnam’s financial sector moving forward
A strategy for the development of Vietnam’s finance sector was approved by Decision 368/QD-TTg in 2022. The strategy outlines a number of key targets and objectives. These are quite broad and the strategy lacks detail, however, it does point toward a country clearly aspiring to develop a world-class financial sector.
But whereas the overall direction of the sector is vague there are a number of key reforms actively being pursued. These include:
Basel Accords
Most banks in Vietnam have been expected to meet Basel II standards since January 1, 2020, per Circular No. 41/2016/TT-NHNN with a vision to all banks complying with Basel II standards by 2025. Though there are currently no codified requirements to meet Basel II standards, many banks are already pursuing these standards of their own volition. This is being driven by the demands of foreign lenders and investors.
International Financial Reporting Standards (IFRS)
Vietnam currently operates on its own accounting system known as the Vietnam Accounting Standards (VAS) as opposed to International Accounting Standards (IAS). Businesses, however, are in the process of switching over to IAS. This is in large part driven by the increased access to capital firms using IAS have, with many already meeting IFRS 9 standards.
Emerging market status
The HoSE is considered a frontier market by FTSE Russell standards. This is due to two key factors. The first is that foreign traders need to prove they have the funds to pay for a share purchase before a trade can be completed; and, the second is foreign ownership limits. There is currently no clear plan as to how these two criteria might be tackled, however, the HoSE aims to meet FTSE Russel’s emerging market criteria in 2025. It’s estimated this could generate in the vicinity of US$10 billion in additional investment for Vietnam’s main stock exchange.
What’s next?
Vietnam’s financial sector is changing rapidly and policy and regulations can turn on a dime. With this in mind, firms and individuals with an interest in Vietnam’s financial sector should ensure they subscribe to the-shiv.
Last updated: December 26, 2024