Circular 08/2026/TT-NHNN as a boost for state-owned banks

System liquidity continues to face pressure amid a strong pace in credit growth, while deposit mobilization has yet to keep pace, despite deposit interest rates having increased since late 2025 and continuing to edge higher during the first three months of 2026.

As of 28 April 2026, total outstanding credit in the banking system reached approximately VND19.5 quadrillion, up 4.4% YTD and 18.26% YoY, while deposit growth remained weaker as capital flows increasingly shifted toward alternative investment channels. As a result, the gap between total credit and deposits across the system continued to widen, from around VND1.33 quadrillion, equivalent to 6.97% of total outstanding loans in March 2026, to approximately VND1.4 quadrillion, or 7.22% of total outstanding loans, by April 2026. This has led to a further increase in banks’ loan-to-deposit ratios (LDRs).

According to MBS Research estimates, by the end of Q1 2026, the gross LDR of 27 listed banks reached 100%, up 2.3 percentage points compared to the end of 2025. Although the current regulatory LDR of the banking system remains below the regulatory cap of 85%, it is generally higher than in previous periods. This suggests that the banking system’s credit growth capacity is becoming increasingly dependent on the ability to expand stable funding sources in order to ease LDR pressure. Since 2026, banks participating in restructuring weak banks have been granted a 50% reduction in reserve requirement ratios. While this policy may partially alleviate localized liquidity pressures and support funding costs, its overall impact on the system is assessed to be moderate. 

Recently, the draft circular amending and supplementing Circular 22/2019/TT-NHNN has further refined the existing regulatory framework and progressed toward alignment with international Basel III standards. This draft is expected to generate positive long-term implications by promoting a safer and more sustainable banking system. However, it introduces several new regulatory aspects that will require additional time to assess practical feasibility and ensure a gradual transition process that does not place excessive pressure on banks.

Following that, SBV has promptly introduced Circular 08/2026/TT-NHNN (Circular 08), effective from 15 May 2026, to provide technical support in the calculation of the LDR. Under Circular 08, banks can include 20% of State Treasury term deposits in the LDR denominator, reversing Circular 26/2022, which had fully excluded these deposits from 1 Jan 2026.

“The new adjustment helps ease LDR pressure for certain banks, particularly state-owned banks, which hold the majority of State Treasury deposits. Vietcombank (VCB), BIDV (BID), and Vietinbank (CTG) could see their LDRs decline by approximately 1.1%–1.5% compared with levels prior to the amendment. In addition, our estimates suggest that this regulatory change could create additional lending capacity equivalent to around 0.3%–0.4% of the banking system’s current total outstanding credit”, said MBS.