Vietnam Raises State Treasury Deposit LDR Share to 50%: Liquidity Boost

Overview

The State Bank of Vietnam (SBV) issued Decision No. 1743/QD-NHNN on July 30, 2026, raising the share of State Treasury (KBNN) term deposits counted in the loan-to-deposit ratio (LDR) from 20% to 50%. Effective August 1, 2026, through July 31, 2028, the change is designed to ease liquidity pressure on banks, particularly the four state-owned commercial banks holding the bulk of these deposits, and to reduce competition for retail deposits.

Key Facts

• SBV Decision No. 1743/QD-NHNN, issued July 30, 2026, raises the LDR counting share of State Treasury term deposits from 20% to 50%.
• The new rule applies from August 1, 2026, to July 31, 2028.
• As of end-March 2026, State Treasury deposits at credit institutions totaled approximately VND 626,700 billion, with over VND 624,000 billion held by Agribank, BIDV, Vietcombank, and VietinBank.
• The adjustment is a technical change to LDR calculation, not a monetary injection, and does not increase money supply.
• The move aims to ease liquidity bottlenecks and cool the deposit rate race among banks.
• Affected tickers include BID, VCB, CTG, ACB, MBB, VPB, TCB, STB, HDB, LPB, MSB, OCB, VIB, SSB, NAB, KLB, PGB, SGB, BAB, NVB, SHB, EIB, VAB, ABB, VBB, and TPB.

What Happened

The State Bank of Vietnam has officially raised the proportion of State Treasury term deposits that banks can count toward their loan-to-deposit ratio (LDR) from 20% to 50%. The decision, formalized in Decision No. 1743/QD-NHNN, takes effect on August 1, 2026, and will remain in force until July 31, 2028. This is a revision to existing prudential regulations for banks.

The change addresses a long-standing paradox: while many banks, especially state-owned commercial banks, hold large State Treasury deposits, only 20% of these were previously counted as mobilized capital for LDR purposes. This limited their ability to use these stable, high-quality funds. By raising the share to 50%, the SBV aims to better reflect the stability of these deposits and provide banks with more room to extend credit without breaching prudential limits.

Market Context

For the banking sector on HOSE, the announcement comes amid strong credit growth outpacing deposit mobilization, putting pressure on liquidity and driving up deposit rates. The four largest state-owned banks—BIDV (BID), Vietcombank (VCB), VietinBank (CTG), and Agribank—hold the majority of State Treasury deposits, so they stand to benefit most. As of August 3, 2026, BID closed at VND 38,250, VCB at VND 60,800, CTG at VND 31,800, and ACB at VND 22,550. The policy is expected to ease liquidity constraints and potentially reduce the need for aggressive deposit rate hikes, supporting net interest margins.

Strategic Significance

This regulatory adjustment is a strategic move by the SBV to support credit growth without expanding the money supply. By recognizing a larger share of State Treasury deposits as stable funding, banks can improve their LDR ratios, freeing up capacity to lend. This is particularly beneficial for state-owned banks, which are key channels for policy lending. For investors, the policy signals a supportive regulatory environment for banks, potentially reducing funding costs and improving profitability. It also reflects the SBV’s flexible approach to managing liquidity and credit growth, which could have positive implications for the broader economy.

What to Watch

• Quarterly earnings reports from BID, VCB, CTG, and other major banks to see if net interest margins improve.
• Deposit rate trends in the coming months to gauge whether the policy cools the deposit race.
• Credit growth data from the SBV to assess whether the policy translates into faster lending.
• Any further regulatory adjustments or extensions of the policy beyond July 2028.
• Market reaction of bank stocks, particularly the state-owned group, in the short term.