Rising credit demand toward the end of the year is putting heavy pressure on credit institutions. Amid a rising interest rate environment, the State Bank of Vietnam (SBV) has directed commercial banks to control interest rates to support businesses and the economy.
Banks face pressure from tight capital
According to the SBV, as of September 30, total outstanding credit across the entire system reached approximately VND20.75 quadrillion. By the end of last week, credit grew by 11.44 percent compared to the end of 2025, higher than the 11.22 percent growth rate of capital mobilization.
Outstanding loans exceeded mobilized capital by nearly VND2 quadrillion, placing pressure on commercial banks, particularly as capital demand spikes during the year-end production and business season.
The SBV reported that as of September 20, the average deposit interest rate for newly arising transactions stood at 6.38 percent per year, up 1.15 percentage points compared to the end of 2025. Meanwhile, deposit interest rates for terms of 6 months or longer at several commercial banks have exceeded 9 percent per year. The actual rate received can reach 9.4 percent to 10 percent per year if customers meet accompanying conditions.
Additionally, commercial banks adjusted base interest rates used as references for floating loans upward to a peak of 13 percent to 13.5 percent per year. Evaluating this development, Head Nguyen Anh Khoa of Analysis at Agriseco Securities stated that the increase in base interest rates reflects pressure on input capital costs as mobilization growth has failed to keep pace with credit growth.
Rising deposit rates are pulling lending rates up, adding pressure on businesses. Nguyen Quoc Ky, Chairman of the Board of Directors of Vietravel Tourism Group and Vice Chairman of the Ho Chi Minh City Business Association, noted that lending rates at the 4 State-owned commercial banks increased by about 1.8 to 2.7 percentage points compared to the same period in 2025.
At private joint-stock commercial banks and digital banks, actual lending rates have surpassed 10 percent per year, "eroding" corporate profits amid weak overall demand.
Banks direct credit into production and business
To support production and business, 15 commercial banks, including those among the four State-owned commercial banks, are deploying preferential credit packages with a total scale of around VND409 trillion, offering interest rate reductions of 1 to 2 percentage points compared to standard rates.
In Ho Chi Minh City, according to Deputy Director Nguyen Duc Lenh of the SBV Regional Branch 2, the banking sector is coordinating with the Ho Chi Minh City Department of Industry and Trade to implement a market stabilization loan program to support supply chains for essential goods during the upcoming holidays and New Year festival.
To maintain macroeconomic stability and foster growth, on October 18, the SBV issued an official document requesting credit institutions to cut costs and share profits to lower interest rates.
Accordingly, commercial banks must cut listed deposit rates for terms of 6 months or longer by a minimum of 0.5 percentage points, avoid a race to hike deposit rates between banks, and reduce lending rates, specifically lowering rates by 1.5 to 2 percentage points for production, business, and priority sectors. The SBV required banks to channel credit into production, business, and key socio-economic development projects, and instructed them not to lower credit standards in pursuit of growth.
In addition to rate reduction requirements, Circular 50/2026 which stipulates limits and prudential ratios for operations of commercial banks and foreign bank branches (taking effect on December 1)—is also expected to help commercial banks proactively balance their capital sources.
According to CEO Nguyen Minh Tuan of AFA Capital Investment Company, a notable highlight is that Circular 50/2026 raises the ceiling on the loan-to-deposit ratio from 85 percent to 95 percent. This new regulation enables banks to expand credit capacity without relying excessively on increasing deposit mobilization, thereby curbing the deposit interest rate competition in the market, especially when year-end capital demand escalates.
However, AFA Capital Investment Company CEO Nguyen Minh Tuan noted that raising the loan-to-deposit ceiling does not mean banks can lend without limit or drastically drop interest rates immediately. The ability to expand credit still depends on actual capital sources, asset quality, borrowing demand, and operational safety requirements across the banking system.
In accordance with the directives of the Government, the Prime Minister, and the State Bank of Vietnam (SBV), several commercial banks have launched programs to reduce lending interest rates by up to 2 percentage points per annum. This initiative aims to lower capital costs and support individuals and businesses in maintaining and expanding their production and business activities.
Effective October 19, the Vietnam Bank for Agriculture and Rural Development (Agribank) has reduced its lending interest rates by up to 2 percentage points per annum compared to standard rates, with a focus on priority sectors and clients engaged in production and business. The bank plans to allocate approximately VND2 trillion from its financial resources to help offset capital costs, thereby assisting individuals and businesses in sustaining and growing their operations.
Agribank also announced the continuation of a preferential credit program, totaling VND70 trillion, aimed at small and medium-sized enterprises (SMEs), priority sectors, and new growth drivers; this program will run from August 2026 through 2028. Interest rates under this program are 1–2 percentage points per annum lower than the bank’s average lending rates for the same tenors.
The Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) has also rolled out a preferential credit program across its entire network, effective October 15. Short-term VND-denominated loans are now available at interest rates starting from 6 percent per annum, 2 percentage points per annum lower than standard rates, depending on the loan tenor and the specific sector.
Among the "Big 4" banks, Vietnam Thuong Tin Joint Stock Commercial Bank (Vietbank) has also introduced a preferential credit package worth VND3 trillion, effective October 19, with interest rates at least 1.5 percentage points per annum lower than standard rates.
The program will run until June 30, 2027, or until the allocated funds are exhausted.
Vietbank also offers short-term loans with preferential interest rates starting from 1.2 percent per annum, funded by the Small and Medium Enterprise Development Fund. These programs target businesses engaged in production and trade, priority sectors, and areas serving as new growth drivers such as science and technology, innovation, digital transformation, and the green transition.
