In response, the banking sector is rolling out a range of measures to help ease the market’s capital shortage and stabilize lending rates.
According to the State Bank of Vietnam (SBV), as of the end of the first quarter of 2026, credit growth had reached over 3 percent, while capital mobilization increased by only around 1 percent. Previously, in 2025, credit expanded by approximately 19 percent, significantly outpacing deposit growth of about 14–15 percent. This widening gap has forced many commercial banks to intensify capital-raising efforts from retail depositors, borrow on the interbank market, and issue valuable papers and bonds to compensate for funding shortfalls. As a result, deposit interest rates at times reached 9–10 percent per annum, while interbank lending rates previously climbed to 16–17 percent per annum.
Liquidity pressure has further intensified as, from 2026, under SBV’s Circular No. 22/2019, deposits of commercial banks at the State Treasury are no longer included in total deposits used to determine the loan-to-deposit ratio (LDR). Meanwhile, this component has gradually declined from 40 percent in 2024 to 20 percent in 2025 and has now fallen to zero, thereby placing additional strain on banking system liquidity.
Under regulations, commercial banks are required to maintain a loan-to-deposit ratio (LDR) below 85 percent, meaning that for every 100 Vietnamese dong mobilized, only a maximum of 85 Vietnamese dong can be lent out. However, statistics show that more than two-thirds of listed commercial banks have approached or even significantly exceeded this threshold, particularly among large-scale lenders. This is also why, despite many commercial banks announcing deposit rate cuts of 0.5–2 percent following a meeting with the SBV Governor in April 2026, medium- and long-term lending rates remain commonly in the range of 9–11 percent per annum; in some cases, petroleum enterprises are even facing short-term borrowing rates of up to 15 percent per annum.
To ease these pressures, the SBV issued Circular No. 08/2026, amending and supplementing several provisions of Circular No. 22/2019, which took effect on May 16, 2026. The new regulation moves away from the LDR framework and introduces a Credit-to-Deposit Ratio (CDR), aligning more closely with Basel III liquidity standards (the international banking safety framework).
Accordingly, credit exposure will include outstanding loans to customers, corporate bond holdings, and credit entrusted to other credit institutions for lending purposes, while excluding equity capital used for fixed asset investment and capital contributions or share purchases. On the funding side, deposits from other credit institutions will no longer be included, whereas 20 percent of term deposits from the State Treasury will continue to be incorporated.
According to the SBV, in the context of persistent challenges in the money market, extending the application of the 20 percent State Treasury deposit component is considered consistent with market realities and contributes to supporting liquidity stability across the banking system.
Many experts also assess this as a reasonable easing of capital adequacy and liquidity measurement rules, particularly as the system-wide LDR had reached nearly 112 percent by the end of March 2026 (according to SSI Securities Corporation’s Research), making State Treasury funds an important supplementary source to reduce funding pressure.
Mr. Nguyen Minh Tuan, CEO of AFA Capital, noted that the continued inclusion of 20 percent of State Treasury deposits is the most effective short-term solution. The group of Big 4 banks (Agribank, BIDV, Vietcombank, and VietinBank) could gain an additional credit capacity of approximately VND80–100 trillion (US$3 billion – US$3.8 billion) from more than VND400 trillion (US$15.2 billion) in State Treasury deposits currently concentrated at these four banks, thereby helping to support credit growth and financing key national projects.
Capital raising to enhance financial buffers
Alongside expectations for supportive policy mechanisms, a wave of capital increases is underway across the banking system as institutions seek to strengthen their financial buffers and meet the roadmap for raising the capital adequacy ratio (CAR) from the current 8 percent to 10.5 percent by 2030, in line with SBV’s Circular No. 14/2025.
At the 2026 annual general meeting season, a series of commercial banks submitted plans to raise charter capital to around or above the VND100 trillion threshold. Notably, Techcombank plans to increase its capital by more than 60 percent to VND113.7 trillion; VPBank targets over VND 106.2 trillion; and MB also aims to surpass the VND100 trillion mark.
In the group of state-owned commercial banks, BIDV plans to use its entire VND13.2 trillion in retained earnings for 2025 to pay stock dividends, moving toward charter capital expansion beyond VND100 trillion. Vietcombank also intends to conduct a private placement of up to 6.5 percent of its shares to strategic investors, combined with share issuance from reserve funds, to lift its charter capital to near VND100 trillion.
Nguyen Thanh Tung, chairman of the board of directors of state-run Vietcombank, stated that capital increases are aimed at maintaining the capital adequacy ratio (CAR) above the minimum level of 8 percent, moving toward Basel III standards, while also creating room for credit expansion and enhancing regional competitiveness. Leaders of MB also emphasized that capital increases are an essential requirement to strengthen financial capacity and improve the CAR.
MB plans to raise its charter capital by 27.5 percent this year, laying the foundation for a target credit growth of around 30 percent while still ensuring prudential safety indicators.
Against this backdrop, Nguyen The Minh, Head of Investment Banking at An Binh Securities Joint Stock Company, noted that successful capital raising would not only help banks ease funding pressures but also create additional capacity to provide stable capital, supporting the Government’s double-digit economic growth target.
Nguyen Minh Tuan, CEO of AFA Capital Investment Joint Stock Company, said that easing the cap on the loan-to-deposit ratio (LDR) must be approached with caution. Although several regional countries, such as Thailand and Malaysia, maintain higher LDR levels of around 93–100 percent, Vietnam still needs an appropriate roadmap to ensure asset quality and control systemic risks before fully converging with Basel III standards.
