LPBank (LPB) Cuts Deposit and Lending Rates Under Government Directive

Overview

LPBank, listed on HOSE as LPB, has cut deposit rates by 0.5-0.6%/year on terms of six months or more and reduced rates on new short-term production and business loans by 1.6-2%/year, effective 19 October to 31 December 2026. The adjustment follows a Government meeting on monetary policy chaired by Deputy Prime Minister Nguyễn Văn Thắng on 16 October 2026 and a State Bank of Vietnam (SBV) directive issued on 18 October 2026 requiring credit institutions to lower lending rates.

Key Facts

• Deposit rates cut 0.5-0.6%/year for tenors of six months and above; 0.05-0.1%/year for tenors under six months.
• New short-term lending rates for production and business cut 1.6-2%/year.
• Programme runs from 19 October 2026 to 31 December 2026 across the entire LPBank system.
• Policy targets individual customers, household businesses and micro-enterprises needing working capital, with priority for agriculture and rural areas.
• Preceded by a 16 October 2026 monetary policy meeting chaired by Deputy Prime Minister Nguyễn Văn Thắng.
• SBV directive dated 18 October 2026 called on credit institutions to cut lending rates and operating costs.
• LPB closed at VND 38,000 on 18 October 2026, the last session before the programme took effect.

What Happened

Ngân hàng TMCP Lộc Phát Việt Nam (LPBank) announced a system-wide programme to reduce both deposit and lending rates, according to information published by the bank. On the funding side, the bank lowered listed deposit rates by 0.5-0.6%/year for tenors of six months or more and by 0.05-0.1%/year for tenors below six months. On the lending side, it cut rates by 1.6-2%/year on newly disbursed short-term loans for production and business activities.

The bank said the deposit adjustment is intended to optimise its cost of funds and create room to lower lending rates, while balancing the interests of depositors and borrowers. General Director Vũ Quốc Khánh framed the move as both a cost-of-funds measure and a form of customer support, saying the bank aims to direct capital to the right needs and borrowers. The programme is described as a direct response to the Government’s policy direction and the SBV’s 18 October directive, which asked credit institutions to cut lending rates, trim operating costs and help businesses and households access capital at reasonable cost.

Market Context

LPB trades on HOSE and closed at VND 38,000 on 18 October 2026, the session before the programme took effect. The announcement places LPBank among the first Vietnamese banks to publicly detail rate cuts after the mid-October policy push, a sector-wide signal that net interest margins may compress into year-end. The scope is deliberately narrow: the lending cut applies only to new short-term disbursements for production and business, and the deposit reduction is concentrated in tenors of six months and above, leaving the bank room to manage its funding mix.

Strategic Significance

The thesis for LPB rests on whether a temporary, directed rate cut can be absorbed without lasting margin damage. Cutting deposit rates first gives the bank a partial offset, since cheaper funding on longer tenors supports the cost side even as asset yields fall. The programme’s short window, ending 31 December 2026, limits the earnings exposure while positioning LPBank favourably with regulators and with the household-business and micro-enterprise segment it is targeting. The competitive question is whether peers follow with deeper cuts, which would compress sector margins further, or hold back, which would let LPBank capture volume at a modest cost.

What to Watch

• LPBank’s Q4 2026 results and disclosed net interest margin versus the prior quarter.
• Whether other HOSE-listed banks announce comparable cuts, confirming a sector-wide repricing.
• SBV credit growth and deposit rate data for October and November 2026.
• Any extension of the programme beyond 31 December 2026 or broadening to medium and long-term loans.
• Foreign-ownership and block-trade filings on LPB around the announcement window.