The banking industry occupies a special role in Vietnam’s economy, as it is the most important financial channel, with both the bond and share markets remaining relatively under-developed. To enable and accommodate continued rapid growth in the general economy, the banking industry needs to be modernised and upgraded, and foreign banks can potentially play an important role in that process. This study seeks to enhance knowledge of the performance of foreign banks in Vietnam and to assess their impact on local banks. Specifically, this study focuses on three key research questions: (1) what are the main drivers of foreign and domestic bank performance in Vietnam? (2) does the presence of foreign banks help or hurt domestic banks? (3) does the impact of foreign banks depend on their origin and/or entry form? In order to address these questions, the study employs two main research methods, namely: (a) analytical review and synthesis; and (b) econometric estimation. The latter involves four panel-data estimation techniques (including panel ordinary least squares, fixed effects, random effects, and general method of moments), as well as the use of a set of reasonably consistent data for the 20-year period 1992-2011 that have been compiled from various sources. Where appropriate, analytical review and synthesis is applied to help create a consistent overall picture of the system. These are not trivial exercises, given the highly fragmented nature of the data that are available in the public domain.