SBV Circular 08/2026 Eases Liquidity Pressure on Vietnamese Banks
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 positive sentiment and a deterministic market-impact score of 7.0/10. Aveluro classifies this story as a positive catalyst in the stock's news coverage. Source coverage came from CafeF - Tài chính ngân hàng, classified as a primary/top-tier source.
Key Facts
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Overview
The State Bank of Vietnam (SBV) issued Circular 08/2026, effective May 16, 2026, amending liquidity regulations for commercial banks. The circular replaces the loan-to-deposit ratio (LDR) with a credit-to-deposit ratio (CDR) aligned with Basel III standards and allows 20% of State Treasury deposits to count toward funding. This move aims to ease liquidity pressure on banks, which have faced widening gaps between credit growth and deposit mobilization, and may help moderate interest rates.
Key Facts
- Circular 08/2026 takes effect on May 16, 2026, amending Circular 22/2019.
- The new CDR ratio replaces the LDR ratio, aligning with Basel III liquidity standards.
- The CDR includes credit to customers, corporate bond holdings, and entrusted lending, while excluding equity used for fixed assets and equity investments.
- On the funding side, deposits from other credit institutions are excluded, but 20% of term deposits from the State Treasury are now counted.
- As of end-March 2026, the system-wide LDR stood at nearly 112%, according to SSI Research.
- Credit growth reached over 3% in Q1 2026, while deposit growth was only about 1%.
- In 2025, credit grew ~19% versus deposit growth of 14-15%, driving deposit rates to 9-10% and interbank rates to 16-17% at times.
What Happened
The State Bank of Vietnam issued Circular 08/2026 to address mounting liquidity pressure in the banking system. The circular replaces the traditional loan-to-deposit ratio (LDR) with a credit-to-deposit ratio (CDR) that is more aligned with Basel III standards. Under the new rules, credit includes loans, corporate bond holdings, and entrusted lending, while funding excludes interbank deposits but includes 20% of State Treasury term deposits. This change effectively broadens the funding base for banks, as State Treasury deposits had been phased out from LDR calculations since 2024, reaching zero in 2026.
The SBV stated that the adjustment is appropriate given current money market difficulties and will help stabilize system liquidity. The circular comes after a meeting in April 2026 where the SBV governor urged banks to lower deposit rates, though lending rates remained high at 9-11% for medium-to-long term loans, with some short-term loans to fuel companies reaching 15%.
Market Context
On May 17, 2026, BID closed at VND 42,950 (-1.38%), SSI at VND 27,900 (-0.71%), and VPB at VND 27,550 (-2.13%). The banking sector has been under pressure from rising deposit costs and tight liquidity, with system-wide LDR near 112% as of March 2026. The circular is seen as a positive regulatory development for large banks like BID (listed on HOSE) that have high loan-to-deposit ratios, as it provides more flexibility in managing funding. SSI and VPB, while not banks themselves, are affected as securities and consumer finance firms reliant on bank funding.
Strategic Significance
The circular represents a pragmatic regulatory response to structural liquidity challenges in Vietnam’s banking system. By adopting a Basel III-compliant CDR and allowing State Treasury deposits to count, the SBV provides banks with a more accurate measure of liquidity risk while easing immediate funding constraints. This is particularly beneficial for state-owned banks like BID, which hold significant State Treasury deposits. The move may reduce the need for aggressive deposit rate hikes, potentially stabilizing net interest margins for banks. However, the circular does not address the root cause of the credit-deposit gap, which is rapid credit expansion outpacing savings mobilization.
What to Watch
- Q2 2026 earnings reports from BID, SSI, and VPB to assess impact on net interest margins and funding costs.
- SBV policy meetings for further adjustments to liquidity regulations or interest rate guidance.
- Deposit rate trends at commercial banks, especially whether the circular leads to a sustained decline in deposit rates.
- Credit growth data for Q2 2026 to see if the gap with deposit growth narrows.
- Foreign ownership limits and any changes in foreign investor sentiment toward Vietnamese bank stocks.