SBV Orders 0.5% Deposit Rate Cut as Vietcombank and Peers Comply

Overview

The State Bank of Vietnam (SBV) has instructed commercial banks to cut average deposit rates on terms of six months or longer by at least 0.5%/year in the final months of 2026, under Official Letter 9736/NHNN-CSTT, with non-compliant institutions facing lower credit growth quotas. Vietcombank (VCB) on HOSE, Agribank, Sacombank and HDBank moved immediately, and the SBV’s signal is being read by MBS Securities as the foundation for a “rates peaking, stocks bottoming” narrative.

Key Facts

• SBV Official Letter 9736/NHNN-CSTT requires a minimum 0.5%/year reduction in average deposit rates for terms of 6 months or more.
• Banks that fail to comply face reduced or reassigned credit growth room (room tín dụng).
• Vietcombank, Agribank, Sacombank and HDBank lowered deposit rates immediately and launched preferential lending packages cutting loan rates by 1.5%-2%/year, with short-term priority sectors down as much as 3%.
• At an SBV and Hồ Chí Minh City People’s Committee conference on 23 October, major banks signed 20 agreements to supply VND 230,000 billion for transport, industrial, energy and social housing projects.
• Public investment disbursement reached VND 660,739.5 billion as of 15 October 2026, or 64.6% of the Prime Minister’s plan, led by Hà Nội (VND 118.2 trillion) and Hồ Chí Minh City (VND 105 trillion).
• Foreign investors net sold VND 1,104 billion for the week and roughly VND 116,606 billion (~USD 4.5 billion) year-to-date.
• The VN-Index closed the week at 1,774.15, up 68.24 points (+4%), its strongest weekly gain of the year.

What Happened

The SBV’s directive, issued as Official Letter 9736/NHNN-CSTT, sets a floor for policy transmission: commercial banks must reduce average deposit rates on six-month-plus terms by no less than 0.5%/year through year-end. The enforcement mechanism is explicit. Institutions that do not comply will be considered for lower credit growth targets, giving the instruction more force than a moral suasion circular. Large banks responded within days, with Vietcombank, Agribank, Sacombank and HDBank cutting deposit rates and rolling out preferential lending packages that reduce borrowing costs by 1.5%-2%/year, and by up to 3% for short-term priority sectors.

The rate push sits alongside a coordinated credit expansion. At a 23 October conference organised by the SBV and the Hồ Chí Minh City People’s Committee, Vietcombank, VietinBank, BIDV, Agribank, MB and HDBank were among the banks signing 20 agreements to supply VND 230,000 billion to infrastructure, industrial, energy and social housing projects. Public investment disbursement reached 64.6% of the annual plan by 15 October, with Hà Nội and Hồ Chí Minh City leading. MBS Securities, cited in the article, argues the combination is building a durable base for domestic cash to re-enter equities.

Market Context

VCB closed at 56 on HOSE on 26 October, down 0.53% on volume of 1,332,300 shares, while sector peers were softer still: CTG at 31 (-0.48%), HDB at 22 (-1.11%) and STB at 68 (-1.17%). The VN-Index’s 4% weekly gain to 1,774.15 was the strongest of 2026, yet average market turnover of VND 17,260 billion remains near the year’s lows and foreign investors continue to sell, with year-to-date net outflows of roughly USD 4.5 billion. The divergence between a rallying index and persistent foreign selling frames the policy question: whether domestic money alone can absorb the supply.

Strategic Significance

The mandate matters less for the 50 basis points themselves than for what it signals about the SBV’s priorities. By tying credit-room allocation to deposit-rate compliance, the central bank is effectively capping banks’ funding costs to protect lending spreads and sustain credit growth into infrastructure and housing. For VCB and large peers, that supports net interest margin stability while compressing the deposit franchise advantage of smaller banks that rely on high rates to attract funding. The risk is a squeeze on deposit inflows if households rotate into equities or gold, which would test the “rates peaking, stocks bottoming” thesis the market is now pricing.

What to Watch

• Monthly SBV deposit-rate disclosures to confirm the 0.5%/year reduction is achieved in average, not just headline, rates.
• Any credit-room reassignment decisions against non-compliant banks, expected in Q4 2026.
• Q3 2026 earnings releases from VCB, CTG, BID, MBB, HDB and STB, particularly net interest margin guidance.
• Foreign net-flow data on HOSE, with the year-to-date outflow near USD 4.5 billion as the key swing variable.
• Disbursement progress on the VND 230,000 billion credit agreements signed on 23 October.