Vietnam Banks Cut Lending Rates 1.5-2pp: VCB, BID, STB Commit at SBV Meeting

Overview

Vietcombank (VCB), BIDV and Sacombank told the State Bank of Vietnam at a 19 October meeting that they will cut lending rates by 1.5-2 percentage points and roll out preferential credit packages for businesses and households. The commitments, made by the chairmen and chief executives of the three lenders, set the tone for the banking sector’s contribution to the SBV’s lower-rate drive, with BIDV alone accepting roughly VND 500 billion in reduced income.

Key Facts

• Vietcombank Chairman Nguyễn Thanh Tùng committed to a minimum 1.5-2 percentage point cut in lending rates, funded by lower operating costs, technology and reduced deposit rates.
• BIDV Chairman Lê Ngọc Lâm announced a credit package of about VND 100,000 billion with tenors up to 6 months, targeting production, business and priority sectors.
• BIDV expects to price that package at 6-7% per year depending on tenor, a 1.5-2 percentage point reduction, and accepts about VND 500 billion in foregone income.
• Sacombank CEO Loic Faussier said the bank has deployed a preferential credit programme totalling up to VND 40,000 billion.
• The meeting took place on the morning of 19 October at the State Bank of Vietnam.
• Vietcombank flagged deposit-rate reduction as its single biggest constraint, citing the need to protect depositor returns.

What Happened

At the SBV meeting on the morning of 19 October, bank leaders were asked to explain how they would deliver cheaper credit. Nguyễn Thanh Tùng, Chairman of Vietcombank, said the bank has two priorities: securing capital for priority sectors and lowering corporate borrowing costs. He said Vietcombank will continue trimming operating expenses, apply technology and reduce input deposit rates to create room for at least a 1.5-2 percentage point cut in lending rates, and will design packages for priority sectors that go beyond the general requirement.

Lê Ngọc Lâm, Chairman of BIDV, said his bank will immediately deploy a package of roughly VND 100,000 billion with tenors of up to six months for production, business and priority sectors, priced at 6-7% per year. BIDV will fund it by cutting operating costs, adjusting deposit rates and accepting about VND 500 billion less in income. Loic Faussier, CEO of Sacombank, said the bank has already launched a VND 40,000 billion preferential credit programme. The article attributes the commitments to statements made at the meeting; no formal SBV directive with a deadline was disclosed.

Market Context

VCB closed at VND 56,200 on HOSE on 19 October, BID at VND 33,650 and STB at VND 61,800. The commitments land as Vietnamese banks balance state-directed rate relief against net interest margin compression, a trade-off that has weighed on bank valuations through the sector’s lower-rate cycle. The article does not provide year-to-date price performance or foreign-ownership data for the three tickers.

Strategic Significance

The binding constraint here is deposit funding, not willingness. Vietcombank’s chairman was explicit that deposit rates must stay attractive enough to retain savers, which caps how far lending rates can fall without a shift in funding mix. For long-term holders, the signal is that the 1.5-2 percentage point cut is being absorbed through cost discipline and margin sacrifice rather than subsidised by the SBV, so earnings sensitivity to deposit competition is the variable that matters. BIDV’s disclosed VND 500 billion income hit gives a rare, quantified benchmark for how the sector is pricing policy compliance.

What to Watch

• Third-quarter and fourth-quarter net interest margin disclosures from VCB, BID and STB, to test whether the 1.5-2 percentage point cuts are fully reflected.
• Deposit rate movements at the four state-owned banks, the key input for any further lending-rate reduction.
• Disbursement data for BIDV’s VND 100,000 billion package and Sacombank’s VND 40,000 billion programme.
• Any formal SBV directive or circular setting a deadline and scope for the rate cuts.
• Credit growth and system liquidity figures from the SBV’s next monthly release.