Outlook: M&As in Vietnam’s Banking Industry in 2024

Posted by Written by Reading Time: 4 minutes

Mergers and acquisitions in the Vietnamese banking industry are becoming increasingly common. In this light, the Vietnam Briefing discusses the opportunities as well as the challenges these deals face in 2024.

In 2023, Vietnam’s banks recorded from individuals and businesses, a 14 percent rise over 2022. This is the fastest growth in the history of the Vietnam banking industry and is demonstrative of consumer confidence in the stability and safety of using Vietnamese banks. With this in mind, the banking industry is experiencing increased activity in mergers and acquisitions (M&As). Over the last five years, Vietnam’s banking industry saw a surge in high-value M&A transactions. The most notable was in Vietnam’s VPBank by Japan’s second-largest bank, Sumitomo Mitsui Banking Corporation. A similarly significant deal was in 2019 when Vietnam’s BIDV bank and South Korea’s KEB Hana Bank joined forces in a deal . These deals, however, maybe just the tip of the iceberg.

What’s driving M&A activity?

There are several factors driving M&A activity in Vietnam’s banking sector. This includes demand for capital among domestic banks, a rapidly growing consumer market, and a need to diversify their products.

Domestic banks need capital

Several banks including DongABank, CBBank, and Ocean Bank carry massive bad loan balances. The State Bank of Vietnam (SBV) currently has these banks under special administration and is actively looking for banks that might be interested in taking them over. In fact, the SBV has issued a draft circular that would allow to make these banks more attractive to foreign buyers.

A rapidly growing consumer market

Vietnam’s consumer class is growing rapidly and so is their thirst for financial products. Of note, digital banking and e-wallet markets have been behind huge growth in client bases at domestic banks. This is the result of the ease and speed of the registration process alongside the ability of customers to easily own bank accounts at more than one bank. Buying into one of Vietnam’s existing banks can therefore give the buyer easy access to a broad swathe of Vietnamese consumers.

Diversify financial products

Furthermore, by buying into an existing institution foreign banks can broaden their financial products quickly and easily. Having a diversity of financial products on offer can boost a bank’s profitability and provide a better customer experience for clients. It also gives banks more upsell and cross-sell options.


Appraisal process

M&A transactions in the Vietnamese banking industry are often concentrated among major banks partly due to evaluation issues. For small-capitalized banks, public financial reporting is sometimes delayed and even inaccurate. This has made it difficult for foreign investors to adequately analyze the state of previous economic activity and forecast future growth. The differences in the application of accounting standards in evaluating financial statements among domestic banks are also a problem for some investors. While most banks and financial institutions worldwide use International Financial Reporting Standards (IFRS), domestic banks in Vietnam still use Vietnam Accounting Standards (VAS). Though Vietnam’s banks are working toward transitioning to IFRS the current hybrid model can be confusing and calculating a Vietnamese bank’s value can be problematic.

Corporate culture

Cultural differences are another reason why foreign investors are still cautious about investing in M&A transactions in the Vietnamese banking industry. This includes how banks are managed and operated and the working styles of the domestic banks versus their foreign counterparts.

Trends in Vietnam’s banking industry

Digital Payments

The boom of Vietnam’s e-commerce and fintech sectors has fueled development and innovation at Vietnam’s banks. In 2023, Vietnam had the fastest growth in digital payment in Southeast Asia. This was an increase of 19 percent from 2022 to 2023 and is estimated to continue to rise at a . This is also being driven by close collaboration between the State Bank, the Ministry of Public Security, and the Ministry of Information and Communications on non-cash payments infrastructure. A result of this has been that Vietnam has 85 firms that provide payment services via the Internet and 52 organizations that .

Foreign Investment

The year 2023 marked a boom in Foreign Direct Investment (FDI) capital in Vietnam. , as of December 20, 2023, Vietnam has disbursed FDI capital worth an estimated US$23.18 million, representing a 3.5 percent rise from the previous year. Specifically in banking and finance, recorded FDI capital worth more than US$7.58 billion across 11 projects. The successful purchase of 15 by Japan’s Sumitomo Mitsui Banking Corporation (SMBC) worth US$1.5 billion was one such example. Another was , when it was announced that Southeast Asia Commercial Joint Stock Bank (SeABank) had agreed to transfer 100 percent of the charter capital of Postal Finance Company Limited (PTF) to Japan’s AEON Group in a deal worth VND 4,300 billion (US$175.2 million).

See also: Vietnam’s Banking Sector: Opportunities and Risks for Foreign Investors.

Looking Forward

With local banks in need of capital, a growing consumer class in need of financial services, and foreign banks looking for low-cost ways to grow their customer base and diversify their product lines, M&As in Vietnam’s banking industry will likely be common in 2024.

Foreign banks looking to learn more about these opportunities should consult with the Vietnam business advisory experts at .

About Us

Vietnam Briefing is published by , a subsidiary of . We produce material for foreign investors throughout Eurasia, including , , , ,  & the . For editorial matters please contact us here and for a complimentary subscription to our products, please click here.

 provide business intelligence, due diligence, legal, tax and advisory services throughout the Vietnam and the Asian region. We maintain offices in Hanoi and Ho Chi Minh City, as well as throughout China, South-East Asia, India, and Russia. For assistance with investments into Vietnam please contact us at vietnam@dezshira.com or visit us at