SBV Proposes Extending State Treasury Deposit Inclusion in LDR for BID, CTG, VCB
This Aveluro analysis covers BID (Đầu tư và Phát triển Việt Nam (BIDV), có tiền thân là Ngân hàng Kiến thiết Việt Nam trực thuộc Bộ Tài chính được thành lậ) in the Banking sector. The classified event type is regulation change, with neutral sentiment and a deterministic market-impact score of 7.0/10. Source coverage came from CafeF - Tài chính ngân hàng, classified as a primary/top-tier source.
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Overview
The State Bank of Vietnam (SBV) has published a draft amendment to Circular 22/2019, proposing to extend the period during which banks can include 20% of State Treasury deposits in their loan-to-deposit ratio (LDR) calculation. This move comes as the LDR ratios of major state-owned commercial banks—BIDV (BID), VietinBank (CTG), and Vietcombank (VCB)—approach the regulatory ceiling of 85%. The amendment aims to provide temporary relief to these banks, which hold nearly all State Treasury deposits.
Key Facts
- SBV proposes amending Circular 22/2019 to extend the inclusion of 20% of State Treasury deposits in LDR calculation, reversing a previous plan to phase out such deposits entirely by 2026.
- As of March 31, 2026, LDR ratios for VietinBank, BIDV, Vietcombank, and Agribank stood at 83.48%, 82.94%, 84.54%, and 83.28%, respectively, all near the 85% ceiling.
- Total State Treasury deposits at the banking system were VND 626.716 trillion as of end-March 2026, with 99.59% (VND 624.167 trillion) held by state-owned commercial banks.
- The draft also transitions from the LDR metric to a broader credit-to-deposit ratio (CDR), which includes corporate bond investments and off-balance-sheet commitments.
- State Treasury deposits are short-term (maximum three months) and volatile, as they can be withdrawn early for state budget needs.
- The SBV cites international practice, noting that the Net Stable Funding Ratio (NSFR) allows partial inclusion of government deposits.
- The amendment follows directives from the Prime Minister and Deputy Prime Minister Nguyen Van Thang amid tight monetary conditions.
What Happened
The SBV released a draft amendment to Circular 22/2019, which governs prudential ratios for banks. A key change is the extension of the period during which banks can count 20% of State Treasury deposits as part of their funding base for LDR calculation. Previously, Circular 22/2019 had set a phased reduction of such deposits, with full exclusion from 2026. The new draft softens this approach, allowing banks to retain 20% of these deposits indefinitely.
The SBV explained that the amendment responds to current monetary market difficulties and follows government directives. The regulator noted that State Treasury deposits are short-term and unstable, making full exclusion potentially disruptive. The draft also shifts from the traditional LDR to a credit-to-deposit ratio (CDR), which encompasses a broader definition of credit and funding sources.
Market Context
BID, CTG, and VCB are listed on HOSE and are among Vietnam’s largest state-owned banks. Their LDR ratios have been trending upward in early 2026, approaching the 85% regulatory ceiling. As of April 15, 2026, BID closed at VND 40,000 (-0.12%), CTG at VND 35,000 (unchanged), and VCB at VND 60,000 (+1.01%). The proposed regulatory relief is seen as supportive for these banks, which rely heavily on State Treasury deposits for funding. The broader banking sector has faced pressure from tight liquidity and rising credit demand.
Strategic Significance
The proposed amendment provides a temporary buffer for state-owned banks, allowing them to maintain lending capacity without breaching LDR limits. This is particularly important as credit demand picks up and the SBV maintains a cautious monetary policy. The shift to a CDR metric also aligns with international standards and may reduce the need for frequent regulatory adjustments. For long-term investors, the extension of State Treasury deposit inclusion reduces the risk of forced deleveraging at these banks, supporting their ability to fund economic growth. However, the reliance on short-term, volatile deposits remains a structural vulnerability.
What to Watch
- Final approval and effective date of the Circular 22/2019 amendment.
- Q2 2026 LDR ratios for BID, CTG, VCB, and Agribank to gauge the impact of the extension.
- SBV’s next monetary policy meeting for any further liquidity measures.
- Changes in State Treasury deposit balances and their allocation among banks.
- Any potential shift in the SBV’s stance on LDR limits or capital adequacy requirements.