SBV Circular 08/2026 Eases LDR Calculation, Boosts Lending Capacity for VCB, BID, CTG

Overview

The State Bank of Vietnam (SBV) issued Circular 08/2026/TT-NHNN on May 15, 2026, amending the calculation of the loan-to-deposit ratio (LDR) to allow banks to include 20% of State Treasury term deposits in the denominator. This regulatory change directly benefits major state-owned banks Vietcombank (VCB), BIDV (BID), and VietinBank (CTG), potentially unlocking tens of trillions of VND in additional lending capacity.

Key Facts

• Circular 08/2026 was issued on May 15, 2026, effective immediately.
• The circular allows banks to include 20% of State Treasury term deposits in the LDR denominator.
• Previously, under Circular 26/2022, the exclusion of such deposits had been phased in, reaching 100% from January 1, 2026.
• As of Q1 2026, State Treasury deposits at VCB, BID, and CTG totaled VND 563,036 billion, up 39% from end-2025.
• Vietcombank held VND 189,159 billion in State Treasury deposits, of which VND 185,250 billion were term deposits.
• BIDV held VND 188,627 billion in State Treasury deposits, with term deposits around VND 185,250 billion.
• The estimated additional LDR headroom for Vietcombank is about VND 37,000 billion.

What Happened

On May 15, 2026, the State Bank of Vietnam promulgated Circular 08/2026/TT-NHNN, amending Circular 22/2019 on safety limits and ratios for banks and foreign bank branches. The key change is in the calculation of the loan-to-deposit ratio (LDR), a critical metric for credit growth capacity. Under the new rules, banks may now include 20% of the balance of State Treasury term deposits in the LDR denominator, while all non-term State Treasury deposits remain excluded.

This marks a reversal from the tightening trajectory set by Circular 26/2022, which had progressively excluded State Treasury term deposits from the LDR calculation, reaching full exclusion by January 1, 2026. The circular takes effect immediately on the date of issuance.

Market Context

On May 14, 2026, the day before the announcement, VCB closed at VND 61,000 (+1.50%), BID at VND 43,550 (+1.75%), and CTG at VND 35,950 (+1.13%), all on HOSE. The banking sector has been under pressure from tight credit growth limits, and this regulatory easing provides a clear catalyst for the three state-owned banks. The move signals the SBV’s intent to support credit expansion, particularly for banks with large State Treasury deposit bases.

Strategic Significance

For Vietcombank, BIDV, and VietinBank, the circular directly expands their lending headroom without requiring additional deposit mobilization. Given their dominant role in infrastructure and corporate lending, this could accelerate credit growth in the second half of 2026. The change also reduces the competitive disadvantage these banks faced under the previous tighter LDR rules relative to private banks with smaller State Treasury deposits. Long-term, it aligns with the government’s push for increased credit to support economic growth.

What to Watch

• Q2 2026 earnings reports from VCB, BID, CTG to see actual credit growth acceleration.
• Any further SBV circulars adjusting other prudential ratios (e.g., capital adequacy).
• Changes in State Treasury deposit levels at these banks in subsequent quarters.
• Market reaction in banking sector indices and foreign investor flows.
• Potential follow-up circulars extending similar treatment to other types of deposits.