Vietnam’s banking sector is facing a significant liquidity crunch as the economy enters the second quarter of 2026. A surge in capital demand has pushed credit growth well ahead of deposit mobilization, forcing financial institutions to hike interest rates to attract funding. This imbalance is creating a ripple effect, increasing the cost of borrowing for both corporations and individual consumers.
The scale of the credit expansion is substantial. In the first three months of the year, approximately 399,000 billion VND in credit was injected into the economy. Even as this reflects a robust recovery in borrowing demand, it has placed immense pressure on banks to balance their funding sources, leading to a generalized rise in both deposit and loan rates.
According to data from the General Statistics Office, by March 24, 2026, total payment means grew by 1.04% compared to the conclude of 2025. But, this is a slowdown from the 1.89% growth recorded during the same period in the previous year. More critically, capital mobilization by credit institutions rose by only 0.44%, a sharp decline from the 1.23% growth seen in the first quarter of 2025.
This disparity is the primary driver behind the current volatility. While credit in the overall economy grew by 2.15%—nearly identical to the 2.28% growth in early 2025—the sluggish growth in deposits has left banks scrambling for liquidity. With total credit outstanding standing at approximately 18.58 million billion VND at the end of 2025, the recent surge has strained the system’s capacity to provide affordable capital.
The Battle for Deposits and the State’s Intervention
The competition for deposits intensified in early March, with roughly twenty commercial banks raising their rates. In some instances, these rates increased two to four times their previous levels. By the end of March, some of the highest annual deposit rates reached 10% at PVCombank, 9.2% at VikkiBank, and 9% at GPBank. Even state-owned giants such as Vietcombank, VietinBank, BIDV, and Agribank were forced to raise rates to remain competitive against private joint-stock banks.
This aggressive pricing environment has prompted the State Bank of Vietnam (SBV) to intervene. The central bank has issued directives urging credit institutions to stabilize interest rates to maintain monetary market stability. The SBV is specifically demanding that banks adhere strictly to regulations regarding the display of deposit rates and maximum interest caps.
The regulator is emphasizing the need for banks to balance their funding sources and use capital rationally. The goal is to ensure solvency and liquidity while directing credit toward priority sectors, such as production and economic growth drivers, to prevent market disruptions.
Rising Costs for Borrowers and Real Estate Stress
The increase in deposit costs has inevitably shifted toward the borrowers. Loan interest rates have climbed rapidly, hitting the real estate sector particularly hard. Nguyen Quoc Hiep, Chairman of the Board of Toan Cau Real Estate Joint Stock Company, noted that corporate borrowing rates, which previously hovered between 7% and 7.5% annually, jumped to 11%–12% by the start of the second quarter of 2026.
The burden is even heavier for individual homebuyers, with mortgage rates reaching 14%–15% per annum. Beyond the cost of capital, access to credit has tightened, increasing the risk of bad debts as companies face cash flow bottlenecks.
Market analysts point to external pressures as a contributing factor. Tensions in the Middle East have pushed up oil prices and strengthened the U.S. Dollar. In the free market, the exchange rate has exceeded 28,000 VND/USD. Maintaining higher interest rates on the Vietnamese dong is seen by some as a necessary measure to create a reasonable gap with the dollar, thereby limiting currency depreciation and encouraging the retention of foreign capital.
Diversification as a Long-Term Solution
Financial experts argue that Vietnam’s heavy reliance on bank credit is a systemic vulnerability. Can Van Luc, a banking and finance expert, suggests that unless other financing channels—specifically the corporate bond market—are opened, the pressure on interest rates will persist.
To lower the cost of capital, experts recommend that banks focus on stimulating Current Account Savings Accounts (CASA). These sight deposits are a stable, low-cost source of funding that reduces the need for expensive long-term certificates of deposit. There is a growing push toward “green” capital mobilization for ecological transitions and sustainable development, which often attracts lower-cost international funding.
Dr. Nguyen Quoc Viet, a lecturer at the University of Economics (Vietnam National University, Hanoi), emphasizes the need to shift the capital structure toward more medium- and long-term funding. He suggests that the economy must gradually reduce its dependence on bank loans by developing the equity and bond markets.
| Metric | Q1 2026 Growth Rate | Q1 2025 Growth Rate |
|---|---|---|
| Economy-wide Credit | 2.15% | 2.28% |
| Capital Mobilization (Deposits) | 0.44% | 1.23% |
| Total Payment Means | 1.04% | 1.89% |
Luu Trung Thai, Chairman of Military Bank (MB), identifies three internal levers banks can use to lower loan rates: reducing high administrative expense ratios (which can range from 25% to 50% in some institutions), improving capital rotation to lower input costs, and enhancing risk management to reduce the cost of bad debt provisions, which currently account for 18% to 20% of the sector’s cost structure.
Disclaimer: This article is provided for informational purposes only and does not constitute financial, investment, or legal advice.
Given the current trajectory, market observers expect high interest rates to persist at least through the end of the second quarter of 2026. The next critical checkpoint will be the release of the second-quarter socio-economic report from the General Statistics Office, which will reveal whether the SBV’s stabilization measures have successfully narrowed the gap between credit growth and deposit mobilization.
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