The State Bank of Vietnam (“SBV”) amended Point a, Clause 4, Article 20 of Circular 22/2019/TT-NHNN on prudential ratios for banks and foreign-bank branches, effective May 15, 2026. On its face, it is a one-line technical fix to the loan-to-deposit ratio (“LDR”) formula. In practice, it reopens material credit-extension capacity at the four state-owned commercial banks, and changes the supply side of corporate lending for the rest of 2026.
What changed. The LDR denominator carve-out for State Treasury (“KBNN”) deposits was tightening on a glide path: 50% excluded in 2023, 60% in 2024, 80% in 2025, and 100% from 1 January 2026. Circular 08 puts 20% of KBNN term deposits back into the denominator. Demand deposits of KBNN, customer escrow, and special-purpose capital deposits remain fully excluded.
Why this is bigger than it looks. The State Treasury is one of the largest single depositors in the Vietnamese banking system, and KBNN balances sit overwhelmingly at the Big 4 banks. With 100% of those balances stripped out of the LDR denominator at the start of 2026, Vietcombank, BIDV, VietinBank and Agribank were running into headroom constraints exactly as credit demand was picking up. Bringing 20% back in lifts the denominator, lowers the ratio, and unlocks tens of trillions of VND of additional permissible lending across the Big 4. Estimates in the local financial press put the aggregate uplift in the hundreds of trillions.
We expect more responsiveness from Big 4 relationship bankers on incremental facility asks and refinancing through Q3–Q4. Pricing pressure should ease at the margin, but transmission to corporate-loan rates will lag.
Banks will need to re-run LDR forecasts under the new denominator before adjusting tenor mix or going back to wholesale funding. The relief is concentrated at banks with sizeable KBNN balances; the impact on private-sector JSCs is modest.
The change is a denominator carve-out only – limits remain at 85% (per Article 20). The mechanical update to internal LDR computation models is the immediate compliance task.
The exclusion still touches 80% of KBNN term deposits and 100% of KBNN demand deposits, so SBV has retained a meaningful policy lever. If credit growth runs hot or KBNN balances swing, expect further adjustment without much warning – Circular 08 itself was issued and made effective the same day.
#VietnamLaw #Banking #LDR #SBV #Circular08
