SBV Eases LDR Calculation, Boosts State Bank Lending Capacity

Overview

The State Bank of Vietnam (SBV) has again adjusted the loan-to-deposit ratio (LDR) calculation, allowing banks to include 50% of State Treasury term deposits in total deposits. This policy, effective from August 1, 2026, to July 31, 2028, expands lending headroom for state-owned banks, including Vietcombank (VCB), BIDV (BID), VietinBank (CTG), and Agribank. The change is the second such adjustment in 2026, following a May move that counted 20% of these deposits.

Key Facts

• Effective August 1, 2026, banks can count 50% of State Treasury term deposits in the LDR denominator, up from 20%.
• The adjustment applies to all banks but primarily benefits state-owned banks, which hold over 99% of State Treasury deposits (VND 626,700 billion as of March 2026).
• The new rule could create nearly VND 200,000 billion in additional lending capacity, roughly 1% of total credit outstanding.
• Vietcombank’s LDR was 84.5% at end-March, the highest among state-owned banks, followed by VietinBank (83.5%), Agribank (83%), and BIDV (82.9%).
• The SBV mandates that banks maintain LDR at or below 85%.
• The policy is part of efforts to support double-digit economic growth by easing credit supply constraints.
• Banks receiving State Treasury deposits must manage maturity mismatches and ensure liquidity even if the Treasury withdraws funds early.

What Happened

On July 30, 2026, the State Bank of Vietnam announced a change to the LDR calculation formula, permitting banks to include 50% of State Treasury term deposits in their total deposit base. This follows a similar adjustment two months earlier that allowed 20% inclusion, reversing a previous full exclusion. The new regulation takes effect on August 1, 2026, and remains in force until July 31, 2028.

The decision was communicated through an official SBV announcement. Huỳnh Duy Sang, Director of Financial Markets at Asia Commercial Bank (ACB), noted that while the change increases lending capacity, it does not alter actual liquidity. For every VND 10 of State Treasury deposits, banks can now count VND 5 toward the LDR denominator, up from VND 2, effectively lowering the ratio and reducing pressure to raise deposits from other sources.

Market Context

State-owned banks on HOSE—Vietcombank (VCB), BIDV (BID), and VietinBank (CTG)—have been trading near their LDR ceilings, limiting their ability to expand credit. As of July 31, 2026, VCB closed at VND 59,300, BID at VND 38,000, and CTG at VND 30,800. The SBV’s move is timely, as credit demand is rising to meet the government’s double-digit growth target. The policy is expected to ease liquidity pressures across the banking system, particularly for the big four, which hold the bulk of State Treasury deposits.

Strategic Significance

For long-term investors, this regulatory tweak signals the SBV’s commitment to supporting credit growth without relaxing prudential standards. By expanding the LDR denominator, state-owned banks can increase lending without raising additional capital or deposits, improving their net interest margins and profitability. This is particularly beneficial for Vietcombank, which has the highest LDR and thus the most constrained lending capacity. The policy also reduces the need for costly deposit competition, potentially stabilizing funding costs. However, the benefit is temporary (two years), and banks must manage liquidity risks associated with Treasury deposits, which can be withdrawn early.

What to Watch

• Quarterly LDR disclosures from VCB, BID, CTG, and Agribank to see actual headroom expansion.
• Credit growth data from the SBV for Q3 and Q4 2026 to gauge the policy’s impact on lending.
• Any further adjustments to LDR calculation or other liquidity tools by the SBV.
• Statements from bank management on how they plan to utilize the additional lending capacity.
• The maturity profile of State Treasury deposits and any early withdrawal activity that could strain liquidity.