VietinBank (CTG) and BIDV Eyed for Capital Raise as NA Weighs 1.5-2% Rate Cut

Overview

National Assembly deputies debating 2026 growth targets called for long-term refinancing mechanisms and charter capital increases at VietinBank (CTG) and BIDV, citing market lending rates of 9-10% against inflation of roughly 4.5%. The proposal, raised during a plenary discussion on the 2026 socio-economic plan, directly touches the funding capacity of the two largest state-owned commercial banks on HOSE.

Key Facts

• Delegates referenced a 1.5-2 percentage point reduction in interest rates, with deputy Nguyễn Ngọc Sơn asking which borrowers the cut would actually apply to.
• Market lending rates were cited at 9-10%, against inflation of about 4.5%, implying a real rate of 4.5-5%.
• The nine-month trade deficit reached USD 19.42bn; the domestic corporate sector ran a deficit of USD 33.42bn, up 100.2%, while the FDI sector’s surplus fell 58.3%.
• Public investment disbursement reached 62.9% of plan after nine months, but central budget capital stood at only 44.1% versus 73.6% for local budgets.
• Deputy Trần Hoàng Ngân (Hồ Chí Minh City) estimated the remaining capital shortfall at VND 1.2-1.3 quadrillion.
• Proposed fourth-quarter contributors: roughly VND 500 trillion of additional public investment disbursement and about USD 10bn of extra FDI, taking the full-year total to around USD 30bn.
• Only 6 of 34 localities are estimated to meet or exceed their full-year targets.

What Happened

Speaking at the National Assembly session, deputy Trần Hoàng Ngân of Hồ Chí Minh City identified three capital sources that could support the final quarter: public investment, with roughly VND 500 trillion still to be disbursed; FDI, potentially USD 10bn higher for a full-year total near USD 30bn; and domestic credit. He framed the residual gap of VND 1.2-1.3 quadrillion as the central problem, particularly because enterprises need capital at a reasonable cost to sustain production.

Ngân attributed part of the pressure to a structural mismatch: banks fund themselves mainly with short-term deposits but lend medium and long term, while infrastructure projects need four to five years of capital. When liquidity tightens, higher deposit rates push up the lending floor. He proposed a long-term refinancing mechanism for state-owned commercial banks to fund infrastructure, housing and industrial park projects, alongside charter capital increases at VietinBank and BIDV to expand their funding and lending capacity, with emphasis on small and medium enterprises. Deputy Nguyễn Ngọc Sơn of Hải Phòng separately questioned the trade structure, noting that exports of textiles, footwear, seafood and wood all fell or grew only marginally during peak season.

Market Context

CTG closed at VND 30,600 and BID at VND 33,950 on the 17 October 2026 reference date, both on HOSE. The two state-owned banks trade as the core of the Vietnamese banking sector and are the primary conduits for policy-directed lending to infrastructure and industry. The debate lands against a market where nominal lending rates near double digits have compressed real credit demand, and where the State Bank of Vietnam faces a narrow corridor between supporting 2026 growth and containing inflation near 4.5%.

Strategic Significance

The investment case here is capital adequacy rather than earnings momentum. A charter capital increase at VietinBank would relax the Basel II and lending-growth constraints that have historically capped CTG’s balance sheet expansion, while long-term refinancing would reduce the maturity mismatch that forces state banks to price long-tenor infrastructure loans defensively. For BIDV, the same mechanism would support its role in public investment financing. The risk is that the proposal remains a legislative recommendation: no amount, timetable or funding source was disclosed, and any capital raise would require approval from the government and the State Bank of Vietnam, with dilution implications for existing shareholders.

What to Watch

• Formal government response to the National Assembly’s resolution on the 2026 socio-economic plan, including whether the refinancing mechanism is written into policy.
• Any State Bank of Vietnam announcement on charter capital increases for VietinBank and BIDV, with amount and method.
• October and November credit growth and deposit rate data confirming whether the 9-10% lending floor is easing.
• Full-year public investment disbursement figures for 2026, particularly the central budget line at 44.1%.
• Fourth-quarter trade balance data to test whether the USD 19.42bn nine-month deficit is narrowing.