Vietnam Q1 earnings outlook mixed as banks, steel lag while retail, construction gain

Vietnam’s corporate earnings in Q1/2026 are expected to show a mixed picture across sectors, with industrial parks, construction and retail posting solid growth, while profits in banking, securities and steel are likely to slow, according to Vietcombank Securities.

In a report, the brokerage (VCBS) said earnings growth in the banking sector is expected to decelerate as funding cost pressures continue to weigh on net interest margins, while credit growth remains constrained, particularly in real estate lending, a key driver for many lenders.

Private banks are likely to see a sharper slowdown, while state-owned lenders may fare better thanks to lower funding costs and a low profit base in 2025.

In the securities sector, performance is expected to diverge. Leading brokerages with strong margin lending businesses are likely to post year-on-year profit growth, supported by strongly improved market liquidity, expanded lending capacity following capital increases in 2025, and relatively stable investment portfolios.

By contrast, smaller brokerages, which maintain large equity portfolios tied to movements of the VN-Index, may see weaker proprietary trading income amid sharp market corrections.

A similar divergence is forecast in the power sector, according to VCBS. While revenues are expected to rise across the board on higher electricity output, profitability will vary depending on business models. Hydropower firms are likely to benefit from improved output, while thermal power producers (coal-fired, gas-fired and LNG-fuelled) may face margin pressure from rising input costs despite higher generation.

Retail and consumer companies are projected to maintain strong earnings growth, supported by a low base last year. However, inflationary pressures and rising input costs are likely to dampen demand for non-essential goods.

New regulations on e-commerce and product traceability are expected to accelerate market restructuring, shifting demand from informal and grey-market goods to official retailers. Combined with consumer finance solutions, this trend could help leading companies expand market share and protect margins despite weakening real incomes.

In the residential real estate sector, rising interest rates are expected to continue weighing on developers’ margins and dampening homebuyer sentiment and affordability. However, improved legal frameworks may help boost supply.

Housing prices in urban centers are showing signs of cooling after a period of rapid increases, while demand is gradually shifting to suburban areas, supported by improving transport infrastructure.

Industrial park developers are expected to report strong revenue growth, driven by solid leasing activity from late 2025 through early 2026, although profits may vary. Companies with large deposit balances could benefit from rising interest rates.

The report also highlighted rubber producers as a bright spot, as export prices have surged in the first quarter in line with rising oil prices, while progress in land compensation projects has improved.

The construction sector is expected to see a recovery in project pipelines, supported by increased housing supply and accelerated infrastructure development. However, shortages of construction materials may put pressure on profit margins.

Oil and gas companies are forecast to deliver positive earnings growth, though with clear divergence. Upstream firms are likely to benefit from stronger activity and rising global oil prices, particularly amid supply disruption risks linked to tensions around the Strait of Hormuz.

Meanwhile, the steel sector is expected to see increasing divergence between upstream producers with integrated supply chains and downstream firms, which face mounting challenges from stricter environmental regulations and volatility in global trade.