SBV Circular 25 Raises Short-Term Loan Ratio to 40%, Boosts Banking Stocks

Overview

The State Bank of Vietnam (SBV) issued Circular 25 on June 22, amending Circular 22 to raise the maximum ratio of short-term capital used for medium- and long-term loans from 30% to 40%, effective July 1. The move triggered broad gains in banking stocks on June 23, with the VN-Index rising 10.95 points to 1,868.86 by 10:30. Vingroup stocks and banks led the rally, while foreign investors net bought VIC shares worth nearly VND 238 billion.

Key Facts

• SBV issued Circular 25 on June 22, amending Circular 22, raising the short-term capital to medium- and long-term loan ratio from 30% to 40% effective July 1.
• By 10:30 on June 23, the VN-Index rose 10.95 points to 1,868.86; HNX-Index gained 7.42 points to 328.48; UPCoM-Index fell 0.23 points to 127.53.
• Banking stocks: LPB led with +2.85%, HDB +1.19%, BID +1.3%, TCB +1.13%, VCB +0.82%, CTG +0.89%.
• Securities stocks: ORS surged 3.85%, TVS hit the ceiling price.
• VIC rose 3.02% and VHM rose 3.5%, contributing a combined 17.82 points to the VN-Index.
• Foreign investors net bought VIC shares worth nearly VND 238 billion, the largest net buy of the day.
• Other gainers: PET +2.36%, MSR +0.78%.

What Happened

On June 22, the State Bank of Vietnam issued Circular 25, amending Circular 22, which governs the use of short-term capital for medium- and long-term loans. The key change raises the permitted ratio from 30% to 40%, effective July 1. This regulatory easing is intended to provide banks with greater flexibility in lending, potentially boosting credit growth.

The market opened strongly on June 23, with the VN-Index initially surging 20.13 points to 1,878.04 by 9:30. However, the rally moderated by 10:30, with the index settling at 1,868.86, still up 10.95 points. Banking stocks were the primary beneficiaries, with LPB, HDB, BID, TCB, VCB, and CTG all posting gains. The Vingroup pair VIC and VHM also provided significant support, contributing over 17 points to the index. Foreign investors were net buyers, particularly in VIC, accumulating nearly VND 238 billion worth of shares.

Market Context

As of June 22, BID closed at VND 42,450 (+1.56%), CTG at VND 33,850 (+0.30%), HDB at VND 25,250 (+0.40%), and LPB at VND 49,200 (+2.50%). The banking sector has been a key driver of the VN-Index in recent months, and the SBV’s policy easing provides a fresh catalyst. The VN-Index’s rise to 1,868.86 reflects continued bullish sentiment, though the intraday cooling suggests some profit-taking. The broader market showed divergence, with sectors like mining, retail, and oil & gas underperforming.

Strategic Significance

Circular 25 represents a material regulatory easing for Vietnamese banks, allowing them to extend more medium- and long-term loans using short-term deposits. This could accelerate credit growth and support economic expansion, particularly in real estate and infrastructure. For banks like BID, CTG, and LPB, the higher ratio may improve net interest margins and lending capacity. However, it also raises liquidity risk, as banks rely more on short-term funding for long-term assets. The SBV’s move signals a pro-growth stance, which could benefit the broader market, but investors should monitor asset quality and liquidity metrics.

What to Watch

• Q2 2026 earnings reports from major banks (BID, CTG, VCB, TCB) to assess credit growth and NIM impact.
• SBV’s next monetary policy meeting for any further easing or tightening signals.
• Foreign ownership trends in banking stocks, especially after the circular.
• Liquidity ratios and NPL disclosures from banks in the coming months.
• Market reaction to any potential SBV guidance on the new ratio’s implementation.