Securities firm VNDirect said the State Bank of Vietnam has increased policy rates by 200 basis points and this rate hike would inevitably put pressure on banks' net interest margin this year as the cost of funds rises and they are unlikely to pass on the entire burden to lending rates. Meanwhile, the stagnant property market and sluggish recovery in the corporate bond market will stress asset quality and liquidity.

All in all, the tightening of monetary policy and macro uncertainties are expected to affect the outlook for the sector in 2023. In this context, VNDirect estimates HDBank's earnings growth to be 16 and 20 percent in the financial year 2023- 2024 compared to a compounded annual growth rate (CAGR) of 30 percent for FY2019-2021. This figure is higher than the industry forecast (10.4 percent) as HDBank is likely to get a higher credit growth quota than other banks. In the event, its credit growth will top 20 percent in 2023.

Over the long term, VNDirect remains upbeat about the outlook for HDBank as it adopts a lending model focused on the high demand in rural areas. Meanwhile, its strong insurance operations can support its fee income growth. Along with good asset quality, the bank also posted a good return rate of 23 percent compared to the 20 percent average for the industry in 2020-2022. VNDirect expects VIB's credit growth to slow down to 10-15 percent over the next two financial years.

In the current higher interest rate environment and with the ongoing liquidity constraints, VIB's earnings growth will soften to 15-18 per cent across FY2023-2024F (CAGR for FY2019-2021 of 40 percent). However, in the long run analysts still like VIB for its strong position in Vietnam's retail banking arena. Similarly, VNDirect also predicts that in 2023-2024 VietinBank (HSX:CTG) will achieve credit growth of about 10 percent, 1-2 percentage points lower than the expectation for the industry as a whole.

VietinBank's net profit is expected to grow by 10.2 percent in 2023 and 18 percent in 2024, with return on equity being 15.5 percent and 16 percent. MB Securities forecasts VietinBank's consolidated pre-tax profit in 2023 to grow by 13.8 percent to $983.64 million, almost equivalent to the 2022 growth rate.

VNDirect also has a conservative prediction for Techcombank (HSX:TCB) in FY2023-2024 due to industry obstacles and close oversight of the bond and real estate markets. Techcombank's credit is expected to grow at 10 percent in 2023 (CAGR FY2019-2021 of 25 percent). The bank will have to increase provisioning to prevent bad debt risks.

All in all, VNDirect expects Techcombank's net profit to grow at 12-14 percent for the next two years. With regard to Vietcombank (HSX:VCB), MBS forecasts total operating income in 2022 and 2023 to rise to nearly $2.67 billion and $2.97 billion, up 10.8 percent and 11 percent respectively.

Pre-tax profit for 2022 is expected to reach $1.43 billion and could hit $1.75 billion in FY 22-23, up 22.7 percent and 22.2 percent. MBS projects ACB's pre-tax profit to top $722.32 million in 2022, up 41.7 percent from the previous year. However, this figure could decelerate to 8.6 percent in 2023 to $782.24 million.