Vietnam Banks Cut Lending Rates, SBV Eases Credit Rules to Boost Growth

Overview

In response to a directive from Prime Minister Lê Minh Hưng, Vietnamese commercial banks have rolled out lending programs with significantly reduced interest rates for priority sectors and small and medium-sized enterprises (SMEs). The State Bank of Vietnam (SBV) has simultaneously introduced supportive policies, including raising the maximum ratio of short-term funds used for medium- and long-term loans from 30% to 40% and exempting certain real estate credit from growth limits. These moves are designed to stimulate economic growth and are relevant to major listed banks such as BIDV (BID), Vietcombank (VCB), VietinBank (CTG), MB (MBB), Sacombank (STB), and HDBank (HDB).

Key Facts

• On August 13, 2026, Prime Minister Lê Minh Hưng held a working session with the State Bank of Vietnam and credit institutions, urging banks to stabilize interest rates and reduce lending rates.
• Banks are required to offer preferential lending rates at least 1% per year lower than the average lending rate for the same tenor, targeting economic growth drivers and SMEs.
• The SBV raised the maximum ratio of short-term funds used for medium- and long-term loans from 30% to 40%, effective from July 1, 2026.
• From January 1, 2026, to December 31, 2026, 25 credit institutions are exempt from counting additional credit for social housing and industrial zones against real estate credit growth limits.
• The SBV has guided banks to extend credit to 18 large-scale infrastructure projects with regional and local economic impact.
• On July 30, 2026, the SBV issued Decision No. 1743/QD-NHNN, further detailing supportive measures.
• BIDV (BID) closed at 38,250 VND on August 15, 2026; Vietcombank (VCB) at 58,500 VND; VietinBank (CTG) at 31,450 VND; and MB (MBB) at 20,000 VND.

What Happened

Following the Prime Minister’s directive, several commercial banks announced lending programs with reduced interest rates, aiming to support priority sectors and SMEs. The SBV has also implemented a series of policies to enhance liquidity and provide more room for banks to balance capital. These include adjusting the short-term funding ratio for medium- and long-term loans from 30% to 40% and allowing 25 credit institutions to exclude certain real estate credit from growth limits.

The Prime Minister emphasized the need for banks to share responsibility with the economy by stabilizing interest rates, reducing lending rates, and directing credit to productive sectors. The SBV had earlier required banks to build and announce credit programs with preferential rates from August, and many banks had already launched such programs before the meeting.

Market Context

Major banks on HOSE, including BIDV (BID), Vietcombank (VCB), VietinBank (CTG), and MB (MBB), have seen stable trading recently, with closing prices on August 15, 2026, ranging from 20,000 VND (MBB) to 58,500 VND (VCB). The policy push comes amid a broader effort to boost credit growth and support economic recovery, with the SBV balancing inflation control and growth targets. The banking sector is expected to benefit from increased credit demand and improved liquidity, though margin compression from lower lending rates may weigh on net interest margins.

Strategic Significance

For long-term investors, these policy measures signal a supportive regulatory environment for banks, potentially driving higher credit growth and improved asset quality as SMEs and infrastructure projects receive funding. The exemption for real estate credit could ease pressure on banks’ balance sheets, while the higher short-term funding ratio provides additional lending capacity. However, the mandated rate cuts may compress margins, making operational efficiency and cost management critical for banks to sustain profitability. The focus on infrastructure and SMEs aligns with the government’s growth agenda, positioning banks that effectively execute these programs to gain market share.

What to Watch

• Quarterly earnings reports from major banks (BID, VCB, CTG, MBB) for Q3 2026, due in October, to assess margin trends and credit growth.
• Implementation details of the preferential lending programs, including actual disbursement volumes and take-up by SMEs.
• SBV policy updates on interest rates and credit growth targets in the remainder of 2026.
• Progress on the 18 infrastructure projects and their impact on bank lending.
• Any changes in the real estate credit exemption policy beyond 2026.