Which bank stocks will escape the Middle East turmoil?

The Middle East conflict escalated in March and also weighed on Vietnam’s stock market, increasing caution in capital flows and raising the risk of corrections across multiple sectors, including banking.

Market retreat as geopolitical risk rises

By the end of March, the VN-Index closed at 1,674.49 points, down nearly 206 points over the month (about an 11% decline). The banking sector index fell more than 9%, retreating to 956.82 points as of March 31, reflecting that the sector remained pressured by the broader market backdrop.

Geopolitical tensions also heightened concerns that inflationary pressures could return, pushing up the cost of capital. This reduced the appeal of risk assets and increased selling pressure. In this context, the banking sector’s total market capitalization fell by nearly 259,000 billion dong from the end of February (about 9%).

Bank stocks: broad weakness, a few exceptions

Negative momentum spread across the sector, with more than 85% of bank codes declining. BID was the biggest laggard, down 18%, while the other two large-cap banks, VCB and CTG, fell 10% each.

Despite the overall red trend, several banks bucked the move: ABB rose 6%, VBB and EIB edged up about 1%, and SSB was roughly flat versus the end of February.

Q1 2026 performance: gains concentrated in select names

In Q1 2026, the impact of March Middle East-related volatility was visible in end-of-quarter stock performance. EIB led with an 11% gain, followed by STB up 7%, MBB up 5%, and VBB up 2%. Meanwhile, BID and VCB—both of which had surged in January—trimmed their gains to around 1% after three months.

Liquidity: turnover eased, but volumes stayed steady

Liquidity in March for bank stocks did not show a dramatic swing. On average, nearly 248 million shares were matched per session, up about 6% from the previous month (an increase of about 13.7 million shares per session). However, the matched trade value fell by nearly 319 billion dong per session to around 6,300 billion dong per day, suggesting selling pressure was not especially intense and that sentiment remained cautious.

Including negotiated trades, each session saw about 314 million bank shares transferred, up 5% from February. Trade value declined slightly by 4%, to around 7,681 billion dong per day.

While the sector picture appeared relatively calm, liquidity varied by stock. Some names improved notably, including SGB, with matched volume up 88% and matched value up 84%. TCB and OCB also saw higher turnover, with OCB’s trading value up 30% and TCB up 22%. In contrast, PGB recorded the steepest deterioration, with both volume and matched value down around 40%.

By liquidity levels, SHB led with an average of about 71 million matched shares per session and nearly 4 million negotiated shares, up 35% and 11% respectively from February. At the other end, BAB had the lowest liquidity, with average daily turnover below 10,000 shares, down 29% from February.

Foreign investors: net selling accelerated

Against rising uncertainty, foreign investors increased their selling of bank stocks. In March, they net sold nearly 171 million shares, equivalent to about 6,440 billion dong—the highest level since November 2025.

Selling pressure was broad, with the largest net outflows in large-cap names including STB (2,503 billion dong), VCB (1,415 billion dong), and BID (1,253 billion dong). Foreign buying was comparatively smaller, led by ACB at 253 billion dong, followed by VIB at 133 billion dong.

Overall, the March developments underscored that even “pillar” sectors such as banking are not insulated from unpredictable geopolitical factors, particularly as foreign capital shows a clear withdrawal tendency.