Blog

20th October 2026

Credit growth slows, slips in first half of October

Credit growth across Vietnam’s banking system eased from 11.59% at the end of September to 11.44% as of October 14, indicating that lending momentum has stalled and even edged down in the short term.

Meanwhile, the State Bank of Vietnam (SBV) continues to urge banks to cut both deposit and lending rates.

Credit growth sees short-term reversal

According to information released by SBV Governor Pham Duc An at a meeting on Monday, outstanding credit to the economy reached VND20,720 trillion ($800.73 billion) as of October 14, up 11.44% from the end of 2025 and 16.73% year-on-year.

The figure was lower than the 11.59% credit growth previously reported by the SBV. Earlier in October, the central bank said system-wide outstanding credit had reached around VND20,750 trillion ($801.89 billion) as of September 30, up 11.59% from the end of 2025 and 16.69% year-on-year.

This means credit growth since the beginning of the year had fallen by around 0.15 percentage points in just the first half of October.

The development is noteworthy as Vietnam pursues an ambitious economic growth target, which is expected to drive strong demand for capital for production, business activities and investment.

Alongside the credit slowdown, pressure to cut interest rates is mounting. On October 19, the SBV held a meeting with credit institutions chaired by Governor Pham Duc An, following the issuance of Official Letter No. 9608/NHNN-CSTT on measures concerning credit institutions’ operations.

At the meeting, the governor stressed that banks must simultaneously cut operating costs, share profits and reduce funding costs to deliver meaningful lending-rate reductions. Deposit rates are a key component of funding costs; if banks continue to raise them, their room to lower lending rates will be limited.

Under the SBV’s requirements, credit institutions must initially cut listed deposit rates by at least 0.5 percentage points per year for maturities of six months or longer. They must also avoid competing to raise deposit rates in ways that create unfair competition and destabilize the money market. At the same time, banks must introduce measures to cut lending rates by 1.5-2 percentage points per year for production, business activities and priority sectors.

Notably, rate cuts are not intended to be applied uniformly. Banks must target the appropriate borrowers and extend reductions to both existing loans and new lending. The SBV also requires tighter control over credit flowing into potentially risky sectors and warns banks against lowering lending standards to pursue credit growth.

The latest directive follows several rounds of calls for lower interest rates since the beginning of the year. It also signals that regulators want to translate general instructions into more concrete action on both the funding and lending sides.

SBV has called for rate cuts six times

Since the beginning of 2026, the government and the SBV have repeatedly urged the banking system to lower interest rates. Key milestones include Directive 01/CT-NHNN issued early in the year; a meeting with 46 commercial banks on April 9; corrective and follow-up directives in May; further instructions on interest-rate support and credit in subsequent months; and the latest call on October 18. In total, the SBV has called on banks to cut interest rates six times this year.

Following the latest directive, the market has seen concrete responses in both deposit and lending rates. Among state-owned commercial banks, BIDV has launched a short-term dong lending program with rates starting at 6% per year, up to 2 percentage points below its usual rates, depending on loan maturity and sector.

Vietcombank has pledged to cut lending rates by at least 2 percentage points per year from now until the end of the year.

Agribank also launched a program on October 19 to cut lending rates by up to 2 percentage points per year, with around VND2 trillion ($77.27 million) earmarked to support customers.

Among joint-stock commercial banks, LPBank and VietBank were among the first to adjust their listed deposit rates on Monday.

LPBank cut rates by 0.5 percentage points per year for maturities of six to 12 months and by 0.6 percentage points for maturities of 13 to 18 months. Notably, it also reduced rates by 1.6-2 percentage points per year on newly disbursed short-term loans for production and business activities.

VietBank cut deposit rates by 0.5 percentage points per year for maturities of six to 36 months.

The market has also reported that ACB would adjust its deposit rate schedule from Tuesday. The specific reductions should be checked against the bank’s official rate schedule before publication.

These moves suggest that regulatory instructions are beginning to translate into concrete programs. However, the maximum reductions announced under individual programs do not mean that all customers will receive equivalent cuts in their borrowing rates.

Assessing the outlook for the remainder of 2026, brokerage VNDirect said interest rates were likely to remain relatively stable through the end of the year, with more pronounced declines from early 2027 as external pressures ease. The forecast reflects constraints from inflationary pressures, strong demand for capital and the possibility of further U.S. interest-rate increases.

Funding pressures are also making rate cuts difficult to implement evenly across the banking system. According to Bao Viet Securities (BVSC), deposit growth remains below credit growth, continuing to put pressure on banks’ funding. As a result, the SBV’s rate-cut directives may first affect preferential lending programs and listed deposit rates. For borrowing costs to decline sustainably across the broader market, however, banks will still need to improve deposit mobilization and liquidity management.

Source: Dinh Vu, Thai Ha

Latest Posts

Central Vietnam province Lam Dong eyes 101-km electric rail network

12th November 2026

Authorities in Vietnam’s central province of Lam Dong have proposed building six urban electric rail lines spanning over 101 km to connect its famous tourist attraction Da Lat with Lien Khuong International Airport and other major destinations, as part of a long-term urban transport plan through 2050.

The proposal is included in the master plan for five Da Lat wards to 2050, which is under consultation, the provincial government said last week.

The proposed network would comprise six lines with a total length of 101.43 km, using either light rail or monorail technology. The routes would link central Da Lat with Lien Khuong airport and popular destinations such as Suoi Vang Lake, LangBiang Mountain, Tuyen Lam Lake, and the Valley of Love.

The line connecting Da Lat railway station with Lien Khuong airport in Duc Trong commune is prioritized for construction before 2030, providing an additional public transport option for passengers traveling between the airport and the downtown city. The other five lines are planned for development after 2030.

The proposed routes include an 18.5-km line from Da Lat station to Suoi Vang, an 8.55-km line from An Kroet junction to LangBiang, and a 15.78-km line linking Da Lat station with Tuyen Lam lake. Two other routes would connect Da Lat station with the Valley of Love and Tung Lam junction.

The plan also calls for restoring the 84-km Thap Cham-Da Lat railway, which uses a 1,000-mm track gauge, to support tourism and improve connections between Da Lat and the south central coast.

The proposed network is expected to ease pressure on roads, connect tourist destinations with urban gateways and help preserve Da Lat’s landscape, according to the planning consultant.

The master plan covers five wards: Xuan Huong-Da Lat, Cam Ly-Da Lat, Lam Vien-Da Lat, Xuan Truong-Da Lat, and Lang Biang-Da Lat, with a total area of 68,088 hectares.

Situated on a plateau around 1,500 meters above sea level, Da Lat enjoys year-round cool weather that stands in contrast to Vietnam's tropical climate. It used to be a summer hideout for French officials during the colonial time who built villas in the hills to escape the heat and humidity of the lowlands. Da Lat is also known as one of Vietnam’s biggest flower-growing regions.

On July 1, 2025, Lam Dong province was merged with Dak Nong and Binh Thuan provinces to form the new Lam Dong province which borders Dak Lak province, Dong Nai city, Khanh Hoa province, Ho Chi Minh City, Cambodia, and the East Sea.

In the first 10 months of this year, Lam Dong welcomed nearly 20.7 million tourist arrivals, including 1.2 million foreign visitors, generating VND57.51 trillion ($2.24 billion), according to the provincial tourism watchdog.

Consortia involving TotalEnergies, AG&P vie for $1.5 bln southern Vietnam LNG power plant

12th November 2026

Three investor groups have registered to develop the VND39.87 trillion ($1.55 billion) Long Son LNG-fired power plant in Ho Chi Minh City, highlighting growing competition for opportunities in Vietnam’s gas-fired power sector.

The project will cover 42.56 hectares outside the Long Son Petrochemical Industrial Park in Long Son commune.

According to the bid-opening record, the three applicants are a consortium of T&T Group and France’s TotalEnergies Gaz & Electricite Holdings (T&T-TEGEH); a partnership between EVNGENCO3 and Singapore-based AG&P Terminals & Logistics (EVNGENCO3-AG&P LNG); and Ngoc Long Hai Son Group JSC.

The project is included in the revised eighth national power development plan (PDP VIII). It is designed to use combined-cycle gas turbine technology, with imported liquefied natural gas as its primary fuel.

LNG will be supplied through pipelines connecting the Cai Mep LNG terminal to the Long Son area and the planned Southeast Vietnam LNG terminal system. The plant is expected to connect to the 500-kV grid through a transmission line to the Bac Chau Duc 500-kV substation, with commercial operation targeted for June 2031.

It will be one of Vietnam's largest LNG power projects, playing a crucial role in ensuring energy security for the southern region and nationwide while supporting the energy transition through 2050.

Among the three applicants, the T&T-TEGEH consortium stands out for combining a Vietnamese private-sector investor with experience in energy development and an international partner with LNG expertise.

T&T Group is a Vietnamese conglomerate expanding its investments in the energy sector. Through its core energy unit, T&T Energy Group, it is developing power projects with a total capacity of around 2,900 MW, of which nearly 1,200 MW is already commercially operational.

In gas-fired power, T&T is working with South Korean partners to develop the first phase of the Hai Lang LNG power project in the central province of Quang Tri, with a capacity of 1,500 MW.

On September 10, 2026, T&T Energy Group and TotalEnergies Gas & Power Activities signed a memorandum of understanding in Paris to cooperate on the Long Son project.

Under the agreement, TotalEnergies will lead project financing and act as the primary LNG supplier at a competitive price. Meanwhile, T&T Energy will manage domestic regulatory approvals, government relations, and local administrative procedures.

TotalEnergies Gas & Power Activities is part of France-based TotalEnergies SE, a global integrated energy group. In Vietnam, TotalEnergies has supplied LNG to the Thi Vai terminal, which serves as a fuel source for the Nhon Trach 3 and 4 power plants, Vietnam’s first LNG power facility.

Meanwhile, the EVNGENCO3-AG&P LNG consortium combines domestic power generation experience with expertise in gas infrastructure, logistics, and LNG supply chains.

EVNGENCO3, under state utility EVN, operates in power generation and has experience managing and operating large-scale power plants in Vietnam. It recently partnered with Thuan Hai Transport Services JSC to become the sole applicant for the VND7.1 trillion ($276.9 million) Ninh Binh flexible power plant project.

Its partner, AG&P Terminals & Logistics, operates in gas infrastructure and logistics, with a focus on LNG supply chains.

The competition among three applicants underscores investor interest in Vietnam’s LNG-fired power market. However, registration is only the initial stage of the investor selection process. The candidates’ financial and technical capabilities, as well as their ability to meet the project’s implementation requirements, will be assessed in subsequent stages.

Vietnam, US boost agricultural trade cooperation

12th November 2026

Vietnam and the United States continue to strengthen balanced two-way trade, technology transfer, and investment in supply chain development.

Within the framework of trade commitments established for the 2025-2027 period, Vietnam has encouraged businesses to diligently implement purchasing agreements with US partners totaling approximately $3 billion.

The information was announced during a bilateral meeting between Vietnamese Deputy Minister of Agriculture and Environment Dang Ngoc Diep and Deputy Secretary of the US Department of Agriculture (USDA) Stephen Vaden on November 10, coinciding with the largest US agricultural trade promotion delegation's visit to Vietnam.

Breakthroughs in agricultural trade

According to Mr. Diep, all agreements have been executed, significantly exceeding the committed value. In the latter half of 2025 alone, the total import turnover of products under signed memoranda of understanding reached approximately $2.1 billion. For the first nine months of 2026, the value of purchases amounted to approximately $2.8 billion, of which about $2.5 billion comprised committed items including milk and dairy products, livestock products, fruits and vegetables, corn, soybeans, animal feed, and raw timber.

In addition to promoting imports, Deputy Minister Diep requested the US to address certain market access issues for passion fruit and to promptly approve hot vapor treatment measures for fresh fruit exports to the US.

Acknowledging the significant growth aimed at balancing bilateral trade, USDA Deputy Secretary Stephen Vaden noted that amidst negotiations for a reciprocal trade agreement, the US had proposed Vietnam increase its annual import turnover of goods by an additional $1 billion. In reality, after only 10 months of 2026, Vietnam had already imported approximately $3.6 billion, not including about $1.4 billion in cotton imports.

Mr. Vaden also praised the agricultural trade relationship between the two countries, stating that agricultural products from both Vietnam and the US are favored by consumers in each nation.

The delegation includes a large number of producers of specialty agricultural products, fruits, and vegetables, with many businesses from California, he said, adding that the presence of these businesses demonstrates the US's desire to expand market access opportunities in Vietnam and to foster a more substantive trade relationship.

Promoting cooperation in biotechnology and food safety

During the meeting, both sides also discussed enhancing scientific and technological cooperation.

"This could become a new pillar," Mr. Diep said. "Vietnam wishes to promote cooperation with the US in areas such as crop varieties, biotechnology, artificial intelligence, big data, precision agriculture, and digital transformation."

Specifically, the Deputy Minister proposed that both sides research and implement cooperation programs and technology transfer for disease-resistant, drought-tolerant, and salt-tolerant crop varieties, suitable for climate change adaptation.

In response to this proposal, Deputy Secretary Vaden affirmed the US's readiness to cooperate in providing Vietnam access to biotechnology. He commended Vietnam's interest in applying scientific principles in agricultural management and production, and welcomed the initiative to facilitate US companies in bringing research and development (R&D) activities to Vietnam.

He also expressed hope that Vietnam would continue to collaborate with the US in promoting a science-based approach to biotechnology, thereby expanding the application of modern agricultural technologies.

Regarding food safety, Mr. Vaden highlighted similarities in the work programs of both ministries, particularly concerning Salmonella control and DNA residue testing requirements for imported products. The US expressed its desire to continue discussions with Vietnam on regulations related to Salmonella and DNA residue testing, aiming to reduce instances of rejected shipments while ensuring state management responsibilities for food safety.

Currently, the USDA is developing a new framework for Salmonella risk assessment thresholds, aiming to balance consumer health protection requirements with trade facilitation.

The US wishes to coordinate with Vietnamese specialized agencies to discuss and review technical requirements, avoiding unnecessary disruptions in the flow of goods, said Mr. Vaden, stressing that ensuring that Vietnamese and US consumers have access to safe food, while management regulations do not become unnecessary barriers to trade.

See all blog