Vietnam Banks Seek Unified Mortgage Rules Across Amended Land Laws

Overview

Vietnamese banks, including VPBank (VPB), Techcombank (TCB), and BacABank (BAB), are urging regulators to unify legal rules on mortgaged real estate across the amended Land, Housing, and Real Estate Business laws. The push comes as the National Assembly reviews these laws, with final approval expected in August 2026. The goal is to reduce legal conflicts that complicate credit operations, as most bank collateral is property.

Key Facts

• The National Assembly is reviewing amendments to the Land Law 2024, Housing Law 2023, and Real Estate Business Law 2023, with finalization scheduled for August 2026.
• VPBank (VPB) called for clarity on the scope and order of law application for transactions involving credit institutions.
• BacABank (BAB) highlighted issues with mortgaging future-built housing, where projects are used as collateral and then sold to buyers.
• Techcombank (TCB) proposed that laws set general principles, leaving detailed guidance to the government, and suggested separate rules for reciprocal land.
• The Vietnam Banks Association (VNBA) and the Ministry of Construction held a working session in late July to discuss these issues.
• Most bank loans are secured by real estate, making legal consistency critical for credit operations.

What Happened

At a late July meeting between the Vietnam Banks Association (VNBA) and the Ministry of Construction, credit institutions raised concerns about legal overlaps in mortgaged real estate. VPBank’s representative argued that a real estate project can be mortgaged to a bank while still being sold or transferred, creating conflicts when banks need to recover debts. The bank urged regulators to clarify which laws apply in such cases.

BacABank noted that future-built housing can be mortgaged for project financing, but when units are sold to buyers, they may also serve as collateral for home loans. This creates ambiguity about the rights of parties at each stage. Techcombank suggested that laws should only set general principles, with detailed rules delegated to the government, and proposed special treatment for reciprocal land.

Market Context

VPB closed at 25,100 VND on August 16, 2026, on the HOSE. TCB traded at 32 VND, down 0.78%, with volume of 6.6 million shares on August 17. BAB closed at 10,800 VND on August 16. The banking sector is sensitive to regulatory changes affecting collateral management, as real estate is the dominant collateral type. A unified legal framework could reduce litigation and speed up asset recovery, potentially improving banks’ asset quality and lending capacity.

Strategic Significance

For long-term investors, this regulatory push signals banks’ proactive engagement with lawmakers to reduce legal risks in their largest collateral class. If successful, it could lower the cost of credit, accelerate loan disbursement, and improve recovery rates on non-performing loans. This is particularly relevant for banks with large real estate loan books, such as VPB, TCB, and BAB. The outcome will shape the competitive landscape, as banks with stronger legal infrastructure may benefit more from streamlined processes.

What to Watch

• Final drafts of the amended laws submitted to the National Assembly in August 2026.
• Any new decrees or circulars detailing implementation of the amended laws.
• Banks’ quarterly earnings reports for changes in loan growth and asset recovery rates.
• VNBA’s further recommendations and government responses.
• Court rulings on mortgage disputes that test the new legal framework.