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Total collateralized assets at Vietnam's five largest banks—Vietcombank, VietinBank, BIDV, Agribank and MB—continued to expand in 2025, reaching nearly 16 quadrillion dong. Real estate accounted for the vast majority and remained the backbone of the collateral structure, reflecting the close linkage between banking activity and the real estate market.
The total value of mortgaged real estate at the Big5 banks reached more than 11.6 quadrillion dong, up 22.1% from end-2024 (9.5 quadrillion). Its share increased from about 72% to 73% of the total collateral portfolio.
Collateral asset growth occurred in double digits across the group, though with differences in pace and concentration.
The persistence of a high real estate share reflects a hallmark of Vietnam’s credit market, where collateral is a key risk-control element. The absolute scale—approaching 11.64 quadrillion dong—also highlights the close link between the banking system and the real estate market.
Banks favor mortgaging real estate because of its scale and relative suitability for medium- and long-term lending. Compared with assets like machinery or inventories, real estate typically has high value and tends to be less volatile in the short term, supporting loan-to-value management even though prices can be cyclical.
The regulatory framework for real estate is also relatively mature. Ownership rights, land-use rights, and assets attached to land are registered, enabling banks to establish priority in handling distressed assets. In addition, real estate repossession and liquidation are described as more practical and feasible than many other asset types.
Recoverability is another factor. If a borrower defaults, real estate generally offers better liquidity than other asset classes. As the collateral creditor, banks can auction or transfer the asset to recover a large portion of the loan value, particularly when initial valuations were prudent.
Valuation and revaluation are supported by reference markets, including transactions, land price benchmarks and the appraisal industry. This provides a basis for determining collateral value and updating it over time, supporting credit risk management.
From a market perspective, Vietnam’s credit structure makes real estate the default assumption. Many large corporate and personal loans are tied to real estate—from housing purchases and project development to production loans backed by land—creating a tight link between credit growth and the real estate market.
However, heavy reliance on real estate also creates challenges. When the housing market cools and liquidity tightens, collateral realization can take longer and may require large discounting. A high real estate share also increases concentration risk, making banks’ asset quality more sensitive to developments in a single market.
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