Foreign Banks Face AA Rating Hurdle for Vietnam International Financial Center Entry

Overview

A regulatory requirement for a credit rating of AA or above is preventing most foreign banks from entering the Ho Chi Minh City International Financial Center (VIFC-HCMC), according to a senior official. Only JPMorgan currently meets the condition. In contrast, seven domestic banks, including Vietcombank (VCB), have approved plans to establish subsidiaries at the center, while Vietinbank is still studying participation.

Key Facts

• The regulation, part of Decree 329, requires foreign banks to have a parent credit rating of AA or above to set up a 100% foreign-owned bank or branch at VIFC-HCMC.
• Only JPMorgan meets the AA threshold; major banks like Bank of China, Bank of America, and MUFG Bank have lower ratings.
• Over 10 foreign banks have expressed interest but are currently blocked.
• Seven domestic banks have approved plans to establish wholly-owned subsidiaries: Vietcombank, HDBank, SHB, MB, TPBank, LPBank, and Nam A Bank.
• Vietinbank is in the research phase for participation.
• The recommendation to lower the rating requirement to BB or suspend it was made by PGS.TS. Nguyen Huu Huan, Vice Chairman of VIFC-HCMC.
• VCB closed at VND 60,700 on May 16, 2026, down 0.49% on volume of 8.27 million shares.

What Happened

Speaking at a business forum on May 16, 2025, PGS.TS. Nguyen Huu Huan, Vice Chairman of the VIFC-HCMC operating authority, revealed that many foreign banks have been unable to join the international financial center due to the AA credit rating requirement in Decree 329. He noted that only JPMorgan qualifies, while other global banks such as Bank of China, Bank of America, and MUFG Bank fall short. Huan recommended that the government amend the regulation to lower the threshold to BB or temporarily suspend it to attract more international participants.

Domestic banks are moving ahead. Seven lenders—Vietcombank, HDBank, SHB, MB, TPBank, LPBank, and Nam A Bank—have approved the establishment of 100%-owned subsidiaries at the center. Vietinbank is still studying the opportunity. The news was also confirmed by economist Dr. Can Van Luc, who stated that the issue has been reported to the government and the State Bank of Vietnam for resolution.

Market Context

On May 16, 2026, VCB shares on HOSE closed at VND 60,700, down 0.49% with moderate volume. Other affected banks also saw slight declines: HDB fell 0.90%, MBB 0.77%, and SHB 0.71%. The banking sector overall has been under pressure from tight monetary policy and narrow policy space, as noted in the same forum. The international financial center initiative is a key government project to enhance Vietnam’s financial hub status, but regulatory hurdles are slowing foreign participation.

Strategic Significance

For Vietcombank and other domestic banks, establishing subsidiaries at VIFC-HCMC offers a strategic opportunity to expand into international financial services, potentially accessing cross-border capital flows and global clients. However, the exclusion of major foreign banks could limit the center’s competitiveness and depth. If the rating requirement is relaxed, it would open the door for global players, intensifying competition for domestic banks but also boosting the center’s credibility. The outcome hinges on regulatory amendments, which are under government review.

What to Watch

• Government decree amendment lowering the credit rating threshold for foreign banks.
• Q2 2026 earnings reports from VCB and other domestic banks for subsidiary investment details.
• Official announcement of foreign bank applications after any rule change.
• Progress of Vietinbank’s decision on participation.
• State Bank of Vietnam’s policy stance on international financial center development.