BIDV, Vietcombank Cut Lending Rates 2% After Deputy PM Directive

Overview

Deputy Prime Minister Nguyen Van Thang directed the State Bank of Vietnam and commercial banks to cut lending rates by 1.5-2 percentage points for production, business and priority sectors at a 16 October meeting on monetary policy. BIDV (HOSE: BID) responded with a preferential credit program starting at 6%/year from 15 October, and Vietcombank (HOSE: VCB) pledged a cut of at least 2%/year through year-end. The directive lands with deposit rates near 10%/year, sharpening the margin question for BID, VCB and VPBank (HOSE: VPB).

Key Facts

• Deputy PM Nguyen Van Thang chaired a 16 October meeting on monetary policy for the final months of the year and called for lending-rate cuts of 1.5-2%/year.
• BIDV launched a system-wide preferential credit program effective 15 October, with VND short-term lending rates from 6%/year, up to 2 percentage points below its standard rates.
• BIDV’s program targets sectors aligned with government priorities and the year-end 2026 production peak, subject to the bank’s credit conditions.
• Vietcombank Chairman Nguyen Thanh Tung said on the afternoon of 17 October that the bank commits to cutting lending rates by at least 2%/year through year-end.
• Deposit rates have climbed to 9.6%/year at Cake by VPBank and Vikki Bank for 12-month terms, with some small banks at 9.8%/year.
• Corporate lending rates currently run at 13-14%/year, while personal loans reach 17-18%/year and some car loans exceed 19%/year.
• Big4 banks now pay above 8%/year on deposits of more than six months.

What Happened

The directive came at a government meeting on monetary-policy management for the closing months of the year, according to reporting by Tuoi Tre. Deputy PM Nguyen Van Thang asked the State Bank of Vietnam and commercial banks to lower lending rates by 1.5-2%/year for manufacturing, business and priority sectors, framing the move as support for enterprises and households and as a spur to economic growth.

BIDV moved first, announcing a preferential credit package across its entire system from 15 October. The program applies to VND short-term loans and offers rates from 6%/year, which the bank describes as up to 2 percentage points below normal rates depending on tenor and sector. Vietcombank followed on 17 October, with Chairman Nguyen Thanh Tung telling a National Assembly discussion session on the draft amended Law on some articles that the bank would cut lending rates by at least 2%/year through year-end. The article does not disclose the size of either bank’s program or the expected impact on net interest margins.

Market Context

BID closed at VND 33,950 on 17 October, VCB at VND 56,900 and VPB at VND 24,500, all on HOSE. The directive arrives at an awkward point in the rate cycle: deposit rates have pushed toward 10%/year, with Big4 banks paying above 8%/year beyond six months, while corporate lending sits at 13-14%/year. Banks are being asked to compress asset yields just as funding costs rise, a combination that pressures net interest margins across the sector. The article cites small and medium-sized enterprises complaining that priority-sector credit remains hard to access in practice, suggesting the announced cuts may be narrower in application than in headline.

Strategic Significance

The policy tests whether state-directed lending-rate cuts can be absorbed without damaging bank profitability. For BID and VCB, the two state-controlled banks named, the directive carries an implicit public-policy mandate that may limit near-term margin expansion even as credit growth is encouraged. The competitive dynamic favors banks with the lowest funding costs: BIDV and Vietcombank can fund preferential packages from their large low-cost deposit bases, while VPBank’s higher deposit rates, visible in the 9.6%/year at Cake by VPBank, leave less room to match. For long-term investors, the key question is whether the 1.5-2% target is a temporary year-end push or the start of a sustained lower-rate regime that resets sector earnings.

What to Watch

• Third-quarter 2026 earnings releases from BID, VCB and VPB, and any guidance on net interest margin for the fourth quarter.
• State Bank of Vietnam policy statements or meeting minutes detailing how the 1.5-2% target will be monitored and enforced.
• Monthly credit-growth and deposit-rate data confirming whether funding costs peak or continue climbing toward 10%/year.
• Disclosure of the size and uptake of BIDV’s 6%/year package and Vietcombank’s committed reduction.
• National Assembly proceedings on the draft amended law, where Vietcombank’s chairman made the commitment.