Deposit rates rise to up to 9% per year; room to reduce lending rates remains?

Deposit rates in Vietnam have risen to as high as 9% per year, intensifying questions about whether banks still have room to cut lending rates. In the first quarter of 2026, credit growth accelerated faster than deposits, channeling more funds into the economy while tightening liquidity and pushing up deposit pricing.

Credit growth outpacing deposits in Ho Chi Minh City

Data from the State Bank of Vietnam (NHNN) Region 2 show that Ho Chi Minh City’s credit growth in the first quarter reached over 5.28 quadrillion dong, up about 1.5% compared with the end of the previous year. Meanwhile, total deposits of commercial banks were around 5.26 quadrillion dong, increasing only 0.1%.

The widening gap between credit and deposits is pressuring banks’ funding balances, prompting more active liquidity management and stronger competition for deposits to maintain system stability.

Deposit rates climb, especially for medium-term tenors

The shift has quickly appeared in the market as savings rates rose both online and at branches, particularly among private banks. Several banks have offered six-month deposit rates above 7% per year, with some programs approaching 9% per year for certain deposit products.

Examples cited include:

• VPBank: 8.3%–8.5% per year for 6–12 month tenors for priority customers with large deposits.
• Sacombank: up to 8.8% per year for new on-counter deposits for 15–36 months, valid through 30-6 or until the deposit target is reached.
• MSB: up to 9% per year for 12–13 month deposits with a minimum scale of 500 billion dong.
• PVcomBank: a similar rate for deposits of 2,000 billion dong or more, for on-counter placement and end-of-term interest.

State-owned banks also raise rates

The upward trend is not limited to private banks. In the past week, the “Big4” banks—Agribank, BIDV, Vietcombank, and VietinBank—raised deposit rates for tenors of 12 months and longer. The 12-month rate increased from about 5.2% to 5.9% per year, while 24–36 month tenors rose from 5.3% to 6.5% per year.

Credit continues to flow into production and priority sectors

Despite higher deposit rates, banks continue to allocate funds and direct credit toward key production and business sectors. They are also running enterprise-support programs aimed at balancing financing costs and supporting sustainable growth.

Bà Trần Thị Ngọc Liên, Deputy Director of NHNN Ho Chi Minh City Branch (Region 2), said medium- and long-term credit remains dominant in the area, at about 55% of total lending, up 3.22% versus the end of last year—indicating funds are increasingly focused on production, business, and development investment.

“The banking sector in Ho Chi Minh City will continue to steer credit toward prioritized sectors, implementing coordinated solutions to support enterprises, thereby contributing to sustainable economic growth in the area,” she said.

Selected lending figures for priority areas

Data cited shows lending continues to flow strongly into prioritized sectors, including:

• Agricultural and rural development: 576,000 billion dong
• Exports: 157,000 billion dong
• Small and medium enterprises: 1,224,000 billion dong
• Supporting industries: 64,500 billion dong
• High-tech enterprises: 3,100 billion dong

For enterprises in industrial parks, credit remains positively growing, with outstanding around 305,000 billion dong, up 3.24% from end-2025.

Bank-Enterprise connection program in 2026

For the 2026 Bank-Enterprise connection program, 19 commercial banks in the city registered to participate, with a total scale of over 591,000 billion dong, up 14.44% from the previous year’s scale.

Can lending rates still be reduced?

Bank leaders linked the possibility of stabilizing or lowering loan interest to the ability to manage three cost components: operating costs, funding costs (deposit interest rates), and bad-debt risk costs.

Lê Ngọc Lâm, Chairman of BIDV, said that in 2026, with NHNN’s credit growth cap of 11%–12%, state-owned banks are expected to inject about 1 quadrillion dong into the economy. He added that credit will focus on prioritized sectors such as agriculture, exports, processing/manufacturing, energy, and digital transformation, while banks also support cost-reduction measures for private-sector activities.

MB’s Luu Trung Thai argued that banks should focus on three main factors:

• Operating costs: the cost-to-income ratio (CIR) remains high, averaging around 25% for well-run banks, with some at 50%, suggesting room to cut costs.
• Funding costs: deposit interest rates depend on liquidity and capital mobility; when fund flow is smooth, funding costs fall, enabling lower lending rates.
• Bad-debt risk costs: provisions for bad debt currently account for about 18%–20% of banks’ cost structure. Well-managed banks emphasize risk management and compliance, which can reduce risk costs and support lower lending rates.

Overall, the article frames the current environment as one where banks are balancing continued credit growth with tighter liquidity conditions and higher deposit rates—factors that will influence how quickly lending rates can adjust.