According to the State Bank of Vietnam (SBV), total outstanding loans across the banking system reached 17.2 trillion VND (approximately $720 billion) as of June 30, 2025, reflecting a robust 9.9% increase from the end of 2024 and a 19.32% rise compared to the same period last year. This marks the highest credit growth rate since 2023, underscoring a strong push to fuel economic expansion. With outstanding loans at 15.6 trillion VND at the end of 2024, the banking system has pumped an estimated 1.6 trillion VND into the economy in the first half of 2025 alone.
Reports from major banks highlight the intensity of this credit boom. Vietcombank, one of Vietnam’s largest lenders, reported outstanding loans of 1.6 trillion VND by June’s end, a rise of 11.1% from the close of 2024. However, when excluding over 50,000 billion VND in loans extended to support its VCB Neo initiative, the bank’s credit growth adjusts to a still-impressive 7.5%. VietinBank, another state-owned giant, recorded a 10% increase in outstanding loans, while Agribank’s loan book grew to 1.85 trillion VND, up 7.6%. Joint-stock banks have shown even more aggressive expansion, with TPBank posting a near-11.7% increase, KienlongBank achieving 13.2%, and NamABank leading with a striking 14.7% growth compared to the start of the year.
This vigorous credit expansion in the first half of 2025 is laying the groundwork for the SBV’s ambitious full-year target of 16% credit growth. Projections suggest the banking system could inject approximately 2.5 trillion VND into the economy this year, a significant leap from the 2.1 trillion VND recorded in 2024. The SBV’s proactive allocation of credit quotas at the end of 2024 has empowered banks to better manage capital and align their business strategies. However, the rapid pace of lending is straining liquidity and testing the resilience of the financial system’s capital base.
Signs of liquidity stress are becoming evident, particularly in the interbank market. In mid-June, interbank interest rates hit a 12-month low, with overnight rates at 1.9% and one-week rates at 2.3%. By the end of June, however, rates spiked sharply to 6.45% for overnight terms, prompting the SBV to intervene with over 90,000 billion VND injected through open market operations (OMO) within a single week to stabilize liquidity. This volatility underscores the growing pressure on banks to maintain sufficient reserves amid aggressive lending.
In the retail banking sector, the downward trend in deposit interest rates, which had been a hallmark of recent monetary policy easing, stalled in June. By July, several banks began cautiously raising rates on short-term deposits, with some introducing tiered deposit schemes and offering interest rate bonuses ranging from 0.1% to 1% annually to attract larger deposits. These measures reflect a broader struggle to mobilize capital in an environment where credit growth is outpacing deposit accumulation, yet banks face pressure to keep interest rates low to support economic recovery.
Analysts at KB Securities Company (KVSV) have highlighted the liquidity challenges posed by the current lending boom. While state-owned banks benefit from increased treasury deposits and the SBV’s OMO interventions provide a buffer, liquidity pressures are likely to intensify during peak lending periods, particularly towards the year-end. KVSV forecasts a potential uptick in deposit interest rates from the fourth quarter of 2025, as banks compete to secure funding to sustain credit expansion.
A financial expert emphasized the critical role of credit in driving economic growth. “To scale up production and expand the supply of goods, the economy requires a robust flow of financial resources,” the expert noted. “Credit is the lifeblood of production, enabling businesses to invest, enhance capacity, and drive sustainable growth.” The current strategy of accelerating capital turnover by injecting substantial liquidity is seen as essential for supporting business investment and economic output. However, the rapid pace of credit growth is outstripping deposit mobilization, creating a precarious balance.
Official data on capital mobilization for the first half of 2025 remains pending from the SBV. However, a socio-economic report from the General Statistics Office (Ministry of Finance) indicates that, as of June 26, capital mobilization by credit institutions grew by only 6.11%, significantly lagging behind the 8.3% credit growth rate. This divergence highlights a structural “mismatch” in the banking system, where lending is expanding faster than the inflow of deposits. Such imbalances signal potential vulnerabilities, as banks may struggle to sustain their lending momentum without adequate capital reserves.
The SBV’s early allocation of credit quotas has undoubtedly provided banks with greater flexibility to meet demand, but it has also amplified the challenges of balancing growth with stability. The interbank market’s volatility and the uptick in deposit rates suggest that banks are grappling with the dual imperatives of fueling economic growth and maintaining liquidity buffers. As the year progresses, the financial sector will need to navigate these pressures carefully to avoid systemic risks.
Vietnam’s credit boom reflects a broader push to stimulate economic activity in a post-pandemic recovery phase. The government and the SBV have prioritized credit expansion as a tool to support businesses, particularly in manufacturing and export-oriented sectors, which are critical to Vietnam’s GDP growth. However, the rapid increase in lending raises questions about the sustainability of this approach, especially if deposit growth continues to lag.
The liquidity pressures observed in the interbank and retail markets are a reminder of the delicate balance central banks must strike. The SBV’s interventions through OMO have so far prevented a liquidity crunch, but recurring strains could necessitate more aggressive measures, such as further rate adjustments or tighter credit controls. For now, the banking sector remains resilient, bolstered by state-backed liquidity support and treasury deposits, but the path forward will require vigilant oversight.
