Vietnam LDR Cap Raised to 95%: Circular 50/2026 and the Banks That Benefit Most

Overview

The State Bank of Vietnam (SBV) issued Circular 50/2026/TT-NHNN on 30 September, raising the maximum loan-to-deposit ratio (LDR) for commercial banks from 85% to 95% and revising how LDR is calculated. The circular takes effect on 1 December 2026 and applies to HDBank (HDB), Military Commercial Joint Stock Bank (MBB), Techcombank (TCB), Vietcombank (VCB) and VPBank (VPB), among others. The change eases a binding balance-sheet constraint on Vietnamese banks, but the benefit will not be distributed evenly.

Key Facts

• LDR ceiling raised from 85% to 95%, meaning banks may lend up to VND 95 for every VND 100 of deposits mobilised.
• Circular 50/2026/TT-NHNN was issued on 30 September and takes effect 1 December 2026.
• Loans to other credit institutions are removed from the LDR numerator.
• The denominator expands to include foreign borrowings, own capital (charter capital, funds, retained earnings), entrusted capital with risk transfer, qualifying bank bonds counted as Tier 2 capital, and positive interbank market balances.
• Corporate bond investments are removed from the denominator, a relative disadvantage for banks with large corporate bond portfolios.
• State Treasury deposits are counted at only 20%, down from 50% under Decision 1743/QD-NHNN.
• The analysis is attributed to Nguyen The Minh, Director at An Binh Securities (ABS).

What Happened

According to Nguyen The Minh, Director at An Binh Securities (ABS), the LDR cap is one of the key limits constraining how far Vietnamese banks can expand their balance sheets. A higher ceiling reduces liquidity pressure, creates additional room for credit activity and partly relieves competition for deposits. He cautioned, however, that raising the cap from 85% to 95% does not immediately hand the system ten percentage points of extra lending capacity; actual credit growth still depends on the credit room granted by the SBV, each bank’s capital strength and other safety limits.

Circular 50 changes the formula as well as the cap. On the favourable side, loans to other credit institutions are excluded from the numerator, while the denominator gains several funding sources, including foreign borrowings, own capital, entrusted capital with risk transfer, qualifying Tier 2 bonds and positive interbank balances. These adjustments could lower the reported LDR at some banks. On the other side, corporate bond investments are stripped out of the denominator, penalising banks with large corporate bond holdings, and State Treasury deposits now count at only 20% rather than 50%.

Market Context

HDBank (HDB) trades on the Ho Chi Minh City Stock Exchange (HOSE) at VND 28,050 as of 5 October 2026, alongside MBB at VND 19,150, TCB at VND 32,500 and VCB at VND 57,000. Vietnamese bank shares have been sensitive to credit-growth quotas and deposit-rate competition, and any regulatory change that loosens a structural funding constraint tends to be read as supportive for the sector. The ABS commentary frames Circular 50 as broadly positive for banking equities while stressing that outcomes depend on each bank’s asset and funding structure.

Strategic Significance

The strategic read is that Circular 50 shifts the competitive axis in Vietnamese banking from deposit gathering toward balance-sheet composition. Banks with ample own capital, limited reliance on State Treasury deposits and small corporate bond books should see their reported LDR fall or stay comfortably below the new ceiling, giving them more headroom to grow loans without bidding up deposit rates. Banks with large corporate bond portfolios face the opposite arithmetic, since removing those investments from the denominator mechanically raises their ratio. For long-term investors, the circular is best understood as a relative-value signal within the sector rather than a uniform re-rating catalyst.

What to Watch

• Disclosure from HDB, MBB, TCB, VCB and VPB of their restated LDR under the new formula, expected in Q4 2026 filings.
• The SBV’s 2027 credit-growth quota allocations, which determine whether the extra LDR room can actually be used.
• Deposit-rate movements in the final quarter of 2026 as banks reassess funding competition.
• Any further SBV guidance clarifying the treatment of State Treasury deposits and corporate bonds before the 1 December 2026 effective date.