Vietnam Banks Turn to Paper Issuance as Credit Growth Outruns Deposits

Overview

Vietnamese banks are leaning on valuable-paper issuance to close a widening funding gap, with system credit up 9% year-to-date against deposit growth of just 5.5%, according to TCBS Research’s Q2 2026 banking sector update. BIDV (HOSE: BID) carries the largest outstanding issuance at VND 302,000B after a near-34% increase, while ACB, VPBank and MB account for most of the incremental volume. The shift raises the sector’s funding cost at a time when cheap CASA deposits remain below year-end 2025 levels.

Key Facts

• System credit grew 9% in H1 2026; Q2 disbursements alone added VND 811,000B, 1.7x the prior quarter.
• Resident deposits rose only 5.5% year-to-date, taking total mobilization to VND 13.4 quadrillion.
• 20 of 26 surveyed banks recorded deposit growth below loan growth.
• Customer deposits fell from 64.6% to 59.8% of total funding over the past six quarters.
• Outstanding valuable papers across 26 listed banks reached VND 1.96 quadrillion, up 16.7% from the start of the year, or more than 3x resident deposit growth.
• BIDV’s issuance balance rose almost 34% to VND 302,000B, the highest in the system; OCB, ACB and Techcombank each exceed 20% of total funding in paper.
• Sector CASA slipped to 20.2% from 21.7% at end-2025, with 22 banks posting declines.

What Happened

TCBS Research’s Q2 2026 report, cited in the article, describes a clear mismatch between credit expansion and deposit mobilization. Lending growth of 9% year-to-date compares with 5.5% growth in resident deposits, leaving a 3.5 percentage-point gap that has become the main source of liquidity strain. The report notes that 20 of 26 surveyed banks grew deposits more slowly than loans, and that customer deposits have fallen from 64.6% to 59.8% of total funding over six quarters.

Mobilization is highly uneven. HDBank leads with deposit growth of 20.2%, followed by VPBank at 16.7%, while state-owned banks lag: VietinBank 5.4%, Vietcombank 3.4% and BIDV 1.7%, despite BIDV holding the largest deposit base. ACB (-1.5%), Eximbank (-3.8%), SaigonBank (-4.3%) and Bac A Bank (-5.4%) contracted. With CASA at 20.2% sector-wide, funding costs have risen nearly 2 percentage points in six months to the highest since mid-2023. Banks have responded by issuing valuable papers at 8-10% annual rates, lifting system paper balances to VND 1.96 quadrillion, or 9.8% of total funding.

Market Context

BIDV (HOSE: BID) closed at 36,350 on 16 September 2026, with peers HDB at 27,100, VCB at 59,300 and VPB at 27,600. The funding squeeze arrives as credit continues to flow into real-estate corporates, a channel the article flags as a demand driver. For the banking sector on HOSE, the combination of higher deposit costs and heavier reliance on market-based funding compresses net interest margin unless loan yields reprice in step.

Strategic Significance

BIDV’s VND 302,000B paper book, up nearly 34%, signals that even the system’s largest deposit franchise cannot fund current credit growth organically. Vietcombank’s 1.7% paper ratio, supported by customer deposits and State Treasury balances, shows the alternative model. For long-term investors, the key variable is whether the 8-10% coupon on issued paper is a temporary bridge or a structural cost increase; the sector’s CASA decline from 21.7% to 20.2% suggests the cheap-funding era is not returning quickly, which argues for banks with pricing power on the asset side.

What to Watch

• Q3 2026 deposit and credit growth data to see whether the 3.5-point gap narrows.
• Further bank bond and certificate-of-deposit issuance terms, particularly coupon levels versus the 8-10% range.
• CASA ratios in Q3 reports for Techcombank, MB and Vietcombank, the current leaders.
• State Bank of Vietnam policy signals on liquidity support or deposit-rate guidance.
• BIDV’s next funding disclosure to confirm whether the VND 302,000B paper balance continues to grow.