Vietnamese Banks Face Liquidity Crunch as Deposit Growth Lags Credit Demand

Overview

Vietnamese banks are facing a liquidity crunch as deposit growth lags credit demand, leading to intense competition for deposits and rising funding costs. The situation is most acute for major lenders including MB (HOSE: MB), Vietcombank (HOSE: VCB), BIDV (HOSE: BID), and VPBank (HOSE: VPB), which are all grappling with the imbalance. The pressure is forcing banks to offer higher rates, issue bonds, and tap foreign funding.

Key Facts

• Total deposits at Vietnamese banks reached approximately VND 18.2 quadrillion by mid-June, up 6.16% from the start of the year.
• MB’s CEO Phạm Như Ánh said credit demand is rising rapidly while capital mobilization faces difficulties.
• Vietcombank’s chairman Nguyễn Thanh Tùng cited capital imbalance and rising funding costs as key challenges.
• Bank employees are offering rates above 9.3% per year to attract depositors, even for small amounts.
• Some bankers are using personal funds to offer extra interest to meet mobilization targets.
• The liquidity crunch is affecting not only business staff but also credit departments and support functions.
• Banks are accelerating bond issuance and foreign borrowing to supplement funding.

What Happened

Vietnamese banks are experiencing a severe liquidity squeeze, with deposit growth failing to keep pace with credit demand. According to a VnExpress report, bank employees are actively soliciting deposits on social media and from relatives, offering rates above 9.3% per year. The competition is so intense that even small deposits are being courted, a shift from previous practices.

At a recent investor meeting, MB’s CEO Phạm Như Ánh acknowledged that credit demand is rising rapidly while mobilization faces difficulties. He noted that the bank had expected better liquidity this year but actual developments have been unpredictable. Similarly, Vietcombank’s chairman Nguyễn Thanh Tùng said the bank faces five major issues, including capital imbalance and rising funding costs, leaving insufficient capital for credit growth, especially for large projects.

Market Context

The liquidity crunch comes amid a backdrop of rising credit demand from large-scale projects and business expansion. For MB, VCB, BID, and VPB, all listed on HOSE, the pressure on funding costs could compress net interest margins. Recent price context shows BID at 39,500 VND, VCB at 60,300 VND, and VPB at 25,850 VND as of 2026-08-10, reflecting market sentiment. The banking sector as a whole is facing headwinds as deposit competition intensifies.

Strategic Significance

For long-term investors, the liquidity crunch highlights the importance of banks’ funding structures and their ability to manage deposit costs. Banks with stronger retail deposit franchises, like VCB and BID, may be better positioned, while those relying more on wholesale funding could face margin pressure. The situation also underscores the need for banks to diversify funding sources, including bond issuance and foreign borrowing. The ability to maintain credit growth while managing liquidity will be a key differentiator.

What to Watch

• Q2 2026 earnings reports from MB, VCB, BID, and VPB, due in July, to assess margin impact.
• SBV policy actions, such as open market operations or reserve requirement changes, that could ease liquidity.
• Deposit rate trends in the coming months; sustained high rates could signal prolonged pressure.
• Credit growth data for the second half of 2026, to see if demand remains strong.
• Any regulatory measures to address the deposit-credit gap, such as adjustments to the credit growth quota.