Vietnam Banks Cut Deposit Rates 50bps as SBV Pushes Lending Relief

Overview

Vietnam’s commercial banks agreed on 19 October to cut listed deposit rates by at least 50 basis points for terms of six months or more and to reduce lending rates by 1.5-2% for priority sectors, following State Bank of Vietnam (SBV) Directive 9608/NHNN-CSTT issued on 18 October. The four largest state-owned banks — Vietcombank (HOSE: VCB), BIDV (HOSE: BID), VietinBank (HOSE: CTG) and Agribank — lowered their 12-month deposit rate from 5.9% to 5.4% between 20 and 21 October. The decision matters for bank margins and for the relative appeal of Vietnamese equities, which Mirae Asset notes still trade at only a 0.2 percentage point earnings-yield premium to the highest deposit rate on the market.

Key Facts

• SBV Directive 9608/NHNN-CSTT, dated 18 October, instructed credit institutions to reduce deposit and lending rates.
• Banks agreed at a 19 October meeting to cut listed deposit rates by a minimum of 50 basis points for terms of six months and longer.
• Lending rates for manufacturing, business and priority sectors are to fall by 1.5-2% per year.
• Vietcombank and Agribank adjusted on 20 October; BIDV and VietinBank on 21 October, taking 12-month deposit rates from 5.9% to 5.4%.
• At least 24 banks had cut 12-month deposit rates by 21 October, with the deepest reduction at 0.9 percentage points.
• The highest deposit rate on the market remains around 7.2%, against a VN-Index earnings yield of 7.4%.
• September consumer price index rose 5.08% year on year, according to National Assembly delegates cited in the article.

What Happened

The sequence began on 16 October, when Deputy Prime Minister Nguyễn Văn Thắng called for lending rates to be cut by 1.5-2% for production, business and priority sectors. Two days later the SBV issued Directive 9608/NHNN-CSTT requiring credit institutions to lower both deposit and lending rates. At a 19 October meeting, commercial banks reached consensus on a floor of 50 basis points of reduction on listed deposits of six months or more, alongside the lending-rate relief.

The article states that non-compliant banks may face a review of their 2026-2027 credit growth quotas or be required to hold higher-than-prescribed safety ratios — an enforcement lever that gives the agreement more weight than a voluntary pledge. The four state-owned banks moved within two days of the meeting, and by 21 October at least 24 banks had cut 12-month rates. The article attributes the account to Mirae Asset’s market outlook update and cites the SBV directive by number; it does not disclose the aggregate deposit volume affected.

Market Context

VCB closed at VND 56,100 on 27 October, with BID at VND 33,650, CTG at VND 30,350 and AGR at VND 11,500, all on HOSE. The article frames the rate cut against a VN-Index that Mirae Asset expects to find short-term support around 1,700-1,740 points and potentially retest psychological resistance near 1,800. Liquidity rose to roughly VND 13,000 billion per day over the prior week, up 20% week on week, while foreign investors sold a net VND 969 billion. The report flags caution ahead of the US Federal Reserve meeting and the 3 November US midterm elections.

Strategic Significance

The cut compresses deposit costs across the system, which supports net interest margin at VCB and the other state-owned banks only if lending yields fall more slowly than funding costs — the 1.5-2% lending reduction for priority sectors is the offsetting risk. The more durable signal is the enforcement mechanism: tying credit growth quotas for 2026-2027 to rate compliance converts a moral-suasion campaign into a capital-allocation tool, giving the SBV direct leverage over loan growth at the largest banks. For equity investors, the article’s central arithmetic is the constraint — with the top deposit rate at 7.2% and the VN-Index earnings yield at 7.4%, deposit repricing must continue or inflation must cool before domestic savings rotate meaningfully into stocks.

What to Watch

• Third-quarter earnings results for VCB, BID, CTG and AGR, which the article describes as the near-term test of the thesis.
• Further deposit-rate cuts beyond the initial 50 basis points, and whether the 7.2% market ceiling declines.
• September and October CPI prints, with September already at 5.08% year on year.
• SBV credit-growth quota allocations for 2026-2027 and any penalties applied to non-compliant banks.
• October meetings of the US Federal Reserve, Bank of Japan and European Central Bank, plus the 3 November US midterms.