Vietnam banks face whiplash as fast lending fuels asset price risks

Credit growth target is 15% in 2026, but banks can be hurt if prices correct.

Vietnam is expected to enjoy rapid credit growth in the short-term, but banks could get hurt from correction risks, according to Fitch Ratings.

Credit growth in the country accelerated to 19.1% in 2025, from 15.1% in 2024, the ratings agency said in a report published on 28 January 2026. This lifted credit to the economy to about 145% of the GDP by end-2025.

Whilst rapid credit growth can boost activity in the short-term, it can also steer lending to low-return or speculative uses, warned Fitch.

This could inflate asset prices and raise the risk of a later correction that can hurt banks, investment and overall growth, it added.

Vietnam’s central bank had set a credit growth target of 15% in 2026, below the 2025 outcome.

To meet lending demand, banks may increase bond issuance, Moody’s Ratings said in a separate report published last November 2025. Greater reliance on such funding will pose higher refinancing risks for banks.

“Banks will increase reliance on confidence-sensitive market funding and issue more bonds. Furthermore, their modest stock of high-quality liquid assets (HQLA) provides limited liquidity buffers,” Moody’s had said in the report.

Trade risk remains a looming issue for Vietnam in 2026, according to Fitch. The country also faces “heightened enforcement scrutiny” because it sits between the US and China in supply chains.

“We expect the effective US tariff rate on imports from Vietnam to increasingly weigh on export momentum, even though recent growth has been resilient, partly reflecting strong US demand and tariff exemptions for electronics exports,” Fitch said.

Goods deemed transhipped through Vietnam or to contain substantial Chinese inputs potentially facing an additional 40% US tariff, Fitch noted.

In the banking sector, small private banks have been named most vulnerable to the economic impacts of the trade uncertainty and geopolitical risks, S&P Global Ratings said in a report published in late 2025.