Vietnam Circular 50/2026: LDR Cap Raised to 95% for TCB, MBB, VPB, VCB, BID, MSB

Overview

The State Bank of Vietnam (SBV) issued Circular 50/2026, replacing Circular 22/2019, raising the loan-to-deposit ratio (LDR) cap from 85% to 95% and adopting Basel III liquidity standards (LCR/NSFR) on a phased timeline from 2028. Banks that voluntarily adopt early, including Techcombank (TCB), MBB, VPB, VCB, BID and MSB, could gain greater credit growth headroom. The circular takes effect on 1 December 2026, with the new liquidity ratios applying from 1 October 2028 at the latest.

Key Facts

• Circular 50/2026 replaces Circular 22/2019 and takes effect on 1 December 2026.
• The LDR cap rises from 85% to 95%, with a revised formula: the numerator includes only loan balances; equity and foreign borrowings are added to the denominator; corporate bonds and non-lending credit activities are excluded from the denominator.
• The 95% LDR cap applies once a bank transitions to LCR/NSFR compliance, no later than 1 October 2028, or earlier for banks that register for early adoption.
• During the transition, the 85% LDR cap under Circular 22/2019 remains in force.
• Basel III liquidity standards (LCR, NSFR and leverage ratio) are retained, with the LCR phase-in extended to 50-100% over 2028-33, versus 70-100% over 2028-31 in the initial draft.
• High-quality liquid assets (HQLA) are expanded to include government-guaranteed bonds and local government bonds in Tier 1 assets.
• SSI Research estimates that for most banks under coverage, the new formula with the 95% cap provides greater credit growth headroom than the old 85% cap.

What Happened

According to SSI Research, the SBV’s Circular 50/2026 introduces a new LDR ceiling of 95%, up from 85%, alongside a revised calculation methodology. The numerator now captures only loan balances, while equity and foreign borrowings are added to the denominator, and corporate bonds and non-lending credit activities are excluded from the denominator. The 95% cap becomes applicable when a bank transitions to LCR/NSFR compliance, at the latest from 1 October 2028, or earlier for banks that register for early adoption. During the transition period, the 85% LDR cap under Circular 22/2019 continues to apply, ensuring an LDR limit remains in place throughout the roadmap.

The circular retains the core Basel III liquidity standards, including LCR, NSFR and the leverage ratio. The LCR phase-in has been extended to 50-100% over 2028-33, compared with 70-100% over 2028-31 in the initial draft. Several adjustments align the framework with Vietnamese conditions, such as expanding the list of high-quality liquid assets (HQLA) to include government-guaranteed bonds and local government bonds in Tier 1 assets, and allowing the calculation of limits with the parent bank of foreign bank branches. SSI Research notes that the impact should be assessed over time, as short-term and long-term effects differ.

Market Context

TCB trades on the HOSE at VND 32, down 1.23% on 6 October 2026 with volume of 7.24 million shares. MBB closed at VND 19,150 on 5 October 2026, VCB at VND 57 (-0.18%), and VPB at VND 23 (-0.43%) on 6 October 2026. The banking sector remains a key driver of the VN-Index, and regulatory changes to liquidity and credit growth frameworks are closely watched by domestic and foreign investors. The shift toward Basel III standards reflects a broader regional trend of strengthening bank balance sheets while supporting credit expansion.

Strategic Significance

For long-term investors, Circular 50/2026 represents a structural shift from a quantity-based LDR metric to a quality-based Basel III framework that weights funding sources by stability and assets by liquidity. Banks that opt in early, such as TCB, MBB, VPB, VCB, BID and MSB, could gain a competitive advantage by expanding lending headroom ahead of peers. However, SSI Research cautions that greater regulatory room for lending does not automatically translate into stronger deposit mobilization. The gap between credit and deposits is already sizable, and a higher LDR cap could intensify competition for deposits, potentially pressuring funding costs. The long-term benefit is a more accurate risk measure, but near-term execution and funding strategies will differentiate winners.

What to Watch

• SBV announcements on which banks formally register for early adoption of the 95% LDR cap and Basel III standards.
• Q4 2026 and Q1 2027 deposit growth and funding cost trends for TCB, MBB, VPB, VCB, BID and MSB.
• The SBV’s monetary policy meetings and any adjustments to credit growth targets for 2027.
• Circular 50/2026’s effective date on 1 December 2026 and subsequent guidance from the SBV.
• Updates from SSI Research and other analysts on the estimated LDR headroom for each bank under the new formula.