Vietnam Deposit Rates Fall 50bps After 11-Month Climb to 8.1%

Overview

Average deposit rates at Vietnamese commercial banks rose for an 11th consecutive month to 8.1% for 6-12 month terms, according to State Bank of Vietnam (SBV) data published on the evening of 22 October, before lenders cut at least 0.5 percentage points under regulatory direction. The reversal matters for HOSE-listed private banks including Techcombank (TCB), OCB, TPBank (TPB) and Sacombank (STB), which had been paying above-market lending rates and now face simultaneous pressure on funding costs and loan pricing.

Key Facts

• Average 6-12 month deposit rate reached 8.1% in September, up 0.1 percentage points month-on-month and from 5.5% a year earlier.
• Terms above 24 months were quoted at up to 8.2%, while effective rates for 12 and 24 months were commonly 9.3% and 9.8% respectively.
• The pace of increase slowed to 0.1 percentage points per month, versus 0.3 percentage points earlier in the cycle.
• Average lending rates reached 10.9% in September, nearly 2 percentage points above end-2025 levels.
• Short-term lending to priority sectors remains at the 4% ceiling.
• The SBV has ordered deposit rate cuts of at least 0.5 percentage points for terms of 6 months or more, and lending rate reductions of 1.5-2 percentage points per year for manufacturing, business and priority sectors.
• Techcombank, OCB, TPBank and BVBank were among private lenders quoting average lending rates above 11% before the latest adjustment.

What Happened

The SBV’s September data, released on 22 October, showed the deposit rate upcycle extending to 11 months but losing momentum. Public rate schedules understate actual pricing: banks add premiums for new customers, weekend and holiday deposits, and so-called double-day promotions, pushing common 12-month rates to 9.3% and 24-month rates to 9.8%. Most banks impose no minimum deposit, though some require at least VND 20 million to qualify for preferential rates.

The central bank has moved from moral suasion to explicit instruction. It directed banks to cut deposit rates on terms of 6 months or more by at least 0.5 percentage points and to reduce lending rates by 1.5-2 percentage points annually for production, business and priority sectors. The SBV also prohibited unfair competition that destabilises the money market, warning that non-compliant institutions could see remaining 2026 credit limits trimmed, lower 2027 credit growth allocations, or higher safety-ratio requirements. Most commercial banks have now published revised deposit schedules showing 0.5 percentage point reductions, and lenders including Agribank and Sacombank have said they will extend cuts to existing borrowers.

Market Context

Techcombank (TCB) trades on HOSE at VND 34, down 0.88% on 23 October on volume of 5.56 million shares. OCB closed at VND 10,350 and Sacombank (STB) at VND 64,100 on 22 October, while TPBank (TPB) closed at VND 12,750. The banking sector has been the principal driver of the VN-Index’s 2026 advance, and the deposit rate cycle has been the key swing factor for sector earnings: the 11-month climb from 5.5% to 8.1% raised funding costs across the system, and the SBV’s forced reversal now shifts the question from funding cost to asset yield compression.

Strategic Significance

The directive compresses net interest margins from both sides at once. Banks that repriced deposits downward quickly gain a funding-cost benefit, but the mandated 1.5-2 percentage point lending rate cut for priority sectors will flow through to asset yields faster than deposit costs can fall, particularly for private lenders such as TCB, OCB and TPB that built franchises on higher-yielding retail and SME lending. The credit-limit enforcement mechanism is the more consequential detail: by tying compliance to 2027 credit growth quotas, the SBV has converted a rate instruction into a direct constraint on balance sheet expansion, giving state-owned banks with cheaper funding an advantage in the competition for loan growth.

What to Watch

• Third-quarter 2026 earnings releases from TCB, OCB, TPB and STB, particularly net interest margin guidance and deposit cost commentary.
• The SBV’s October and November deposit rate data, due around 22 November, to confirm the 0.5 percentage point cut and whether the upcycle has ended.
• Any formal announcement on 2027 credit growth quotas, which the SBV has linked to rate compliance.
• Disclosure of new preferential lending packages for retail and SME customers, and whether existing borrowers receive repricing.
• Foreign-ownership and block-trade filings at the affected private banks, which may signal how institutional investors are positioning around the margin outlook.