Vietnam Deposit Rates Rise, Squeezing Bank NIMs: LPB, VPB, HDB in Focus

Overview

Vietnamese banks are facing rising deposit rates, with short-term rates approaching the central bank’s 4.75% cap and effective yields on some deposits exceeding 9% due to promotional programs. This trend, driven by credit growth outpacing deposit mobilization, is squeezing net interest margins (NIMs) for lenders including LPB, VPB, HDB, and MBB. The pressure is expected to persist through year-end as low-cost deposits mature and are repriced higher.

Key Facts

• LPBank (LPB) raised its 3-month deposit rate by 0.1% to 4.4% per annum.
• Short-term deposit rates at DongABank, NCB, VPBank, and NamABank are near the 4.75% cap.
• BacABank leads 6-month rates at 7.05%, followed by PGBank at 6.6%.
• HDBank offers the highest 12-month rate at 7.2%, with BacA Bank at 7.1%.
• LPB and VPBank increased 12-month rates by 0.45% and 0.2%, to 6.75% and 6%, respectively.
• Cake by VPBank offers a 2% bonus for new deposits, pushing effective yields up to 9.4%.
• MB’s CEO forecasts flat rates to year-end, but NIM pressure persists as funding costs rise.

What Happened

Deposit rates across Vietnamese banks continued to climb in August, particularly for short and medium terms. LPBank raised its 3-month rate to 4.4%, while several banks, including DongABank, NCB, VPBank, and NamABank, now offer rates close to the 4.75% regulatory ceiling for deposits under six months. At longer tenors, BacABank leads 6-month rates at 7.05%, and HDBank tops 12-month rates at 7.2%.

Beyond listed rates, banks are using promotional campaigns to attract funds. Cake by VPBank is offering a 2% bonus for new deposits, bringing effective yields to as high as 9.4% for some tenors. This indicates persistent funding pressure as credit demand remains strong. At an investor conference on August 6, MB’s CEO Phạm Như Ánh noted that rates are likely to stay flat but warned of continued NIM compression as older low-rate deposits mature and are repriced.

Market Context

LPB closed at 52,900 VND on August 8, 2026, on HOSE, reflecting a strong year-to-date performance despite margin concerns. VPB traded at 25,000 VND, HDB at 26,550 VND, and MBB at 24,150 VND. The banking sector has been under pressure from rising funding costs, with NIMs already narrowing in the first half. The State Bank of Vietnam’s guidance to keep rates stable has helped, but without intervention, rates could be higher. The sector’s outlook hinges on credit growth sustainability and deposit competition.

Strategic Significance

For long-term investors, the rising deposit rate environment tests banks’ ability to manage funding costs and maintain NIMs. Banks with strong retail franchises and low-cost deposit bases, such as MBB and HDB, may be better positioned. LPB’s aggressive rate hikes suggest a focus on deposit growth, which could pressure margins if credit yields do not keep pace. The trend also highlights the central bank’s role in balancing credit growth with inflation control. Banks that can pass on higher costs to borrowers or improve operational efficiency will likely outperform.

What to Watch

• Q3 2026 earnings reports for NIM trends and funding cost disclosures.
• State Bank of Vietnam policy signals on rate caps or open market operations.
• Deposit rate movements at major banks, especially LPB, VPB, and HDB.
• Credit growth data for the third quarter to assess demand sustainability.
• Any regulatory changes to deposit rate caps or reserve requirements.