Banks promote role in capital market through affiliated securities companies

Banks promote role in capital market through affiliated securities companies

Aside from traditional lending activities, many banks are expanding their role in the capital market by increasing bond issuance advisory and investment banking (IB) activities at their affiliated securities companies.

Bond issuance advisories, capital arrangements and investment banking are becoming a new competitive battleground for securities companies. — VNA/VNS Photo

Aside from traditional lending activities, many banks are expanding their role in the capital market by increasing bond issuance advisory and investment banking (IB) activities at their affiliated securities companies.

Securities industry reports and financial statements of securities companies affiliated with commercial banks in Q1 show that competition among securities companies used to mainly revolve around brokerage market share, number of accounts or margin lending balances.

However, bond issuance advisories, capital arrangements and IB are becoming a new competitive battleground for these companies.

A report by S&I Rating notes that TCBS, VPBankS and HDBS, three securities companies affiliated with Techcombank, VPBank and HDBank, currently account for approximately 80 per cent of the total IB revenue of the entire securities industry. Of these, TCBS accounts for 43 per cent, VPBankS 20 per cent and HDBS 16 per cent.

Although IB activities currently account for only about 4.2 per cent of the total revenue of the securities industry, revenue is mainly concentrated in the group of securities companies affiliated with banks. This shows that competition in the market is clearly shifting from brokerage activities to the ability to arrange capital and provide financial solutions for businesses.

This trend is most evident at TCBS. According to the analysis, in the first quarter of 2026, TCBS's IB revenue hit VNĐ526 billion (US$19.9 million), a 27 per cent increase compared to the same period, while the value of corporate bonds advised on issuance reached approximately VNĐ28 trillion. If bank bonds are excluded, TCBS currently holds up to 86 per cent of the market share for advising on corporate bond issuance.

Techcombank is among several other banks that are also accelerating their ​​capital arrangement strategies through their securities companies. For example, VPBankS currently accounts for approximately 20 per cent of the total IB revenue in the securities industry and is among the leading investment banking firms.

In recent years, VPBankS has continuously expanded its activities in issuance advisories, M&As and capital arrangement for businesses, instead of focusing solely on brokerage.

Meanwhile, HDBank is also expanding its presence in the capital market through HDBS. According to analysts, revenue from IB activities currently accounts for approximately 36 per cent of the company's total revenue. The Q1 2026 financial report shows that HDBS's revenue was more recently focused on investment and capital market activities rather than brokerage.

According to financial investment experts, before the Law on Credit Institutions 2024 came into effect, the participation of commercial banks was mainly aimed at seizing opportunities from IPOs, privatisation and M&As. Currently, their role has expanded to include advisory services for bond issuance, arranging syndicated loans and foreign capital-raising transactions, asset management and providing comprehensive financial solutions for corporate clients.

According to S&I Rating's analysis, the biggest advantage of securities firms affiliated with banks comes from their ability to leverage the customer ecosystem and resources of their parent banks. Factors such as brand, cost of capital, customer data and cross-selling capabilities are giving these firms a significant edge. This is also a factor that helps them dominate the IB sector, even though they don't always lead in brokerage market share.

Bond issuance advisories, capital arrangements and investment banking are becoming a new competitive battleground for securities companies. — VNA/VNS Photo

In fact, this trend is occurring in parallel with the expansion of the financial ecosystem of several banks. Aside from lending activities, banks are increasingly investing in digital banking, digital payments, asset management, insurance and securities to increase service revenue.

Developing open banking and data connectivity through Open APIs will be a foundation for forming digital financial ecosystems in the future. In this context, customer data is increasingly becoming a basis for commercial banks to expand financial advisory and capital arrangement services. Through lending, payment and cash flow management activities, banks gain a better understanding of the capital raising and business expansion needs of corporate clients, which helps them develop advisory services for issuance and capital arrangement.

According to a 2026 securities industry outlook report from VPBankS Research, IB is entering a recovery phase, coupled with improvements in the corporate bond market and the demand for medium- and long-term capital mobilisation from businesses. This development also coincides with the recent trend of many banks increasing capital for their member securities companies and expanding their operations in the capital market.

Financial and banking expert Dr Nguyễn Trí Hiếu said as the economy expands, the demand for medium- and long-term capital will no longer be solely dependent on bank credit, but will need to be shared more with the capital market.

According to Hiếu, the emergence of securities companies affiliated with banks shows that many banks are gradually expanding their role from credit providers to providers of comprehensive financial solutions for corporate clients.

Recent developments indicate that IB is gradually becoming an important component in the development strategies of many banks. Along with digitalisation and the expansion of the financial ecosystem, the race to secure funding is expected to become even more intense in the coming years. 

Bizhub