Vietnam banks to weather risks with 16% credit growth target 'reasonable'

Actual loan growth may exceed previous years even as it does not hit the official target.

Vietnamese banks should be able to weather a new slate of credit and liquidity related risks, with some of these concerns being overrated or having misperceptions, according to Maybank Securities.

The investment bank believes that a 15% to 16% credit growth is still reasonable, and that concerns on Vietnam’s high credit/ GDP is “overrated.”

“We estimate about US$110b net new credit will be injected into the economy, almost similar to that in 2025,” said Quan Trong Thanh, analyst at Maybank Securities.

The 15-16% credit growth scenario will create moderate pressure on liquidity, Quan said, although local banks should be able to secure sufficient funding mostly from customer deposits and bank bonds.

“Based on recent moves by state-owned banks and early guidance from others, we expect local banks will pass on higher funding costs to borrowers to protect NIMs. We forecast FY26E NIM to stabilise around 3.3% on average,” Quan said.

Credit headroom for “non-productive” sectors will be less and have higher rates, however, following the central bank’s directives for local lenders to prioritise lending to “productive” sectors, Quan said.

The Vietnamese government has set a target of a 10% year-on-year (YoY) GDP growth in 2026, prompting concerns on how to achieve this whilst maintaining macro stability, Quan n oted in the report. There is also risk in that overheated credit growth ramps up pressure on liquidity, inflation, interest rates and asset quality.

In Maybank Securities’ view, the target will compel authorities and agencies to intensify execution efforts beyond their normal comfort zone.

“As a result, actual growth outcomes stand a better chance of exceeding previous years, even if short of the official target,” Quan said.

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

Trade risk remains an issue, as the country also faces “heightened enforcement scrutiny” because it sits between the US and China in supply chains, Fitch said.

“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.

Separately, Vietnam’s push to adopt international norms for its banking sector may lead to credit divergence between small and larger banks, said S&P Global Ratings.

Weaker, capital-constrained banks may struggle to meet regulatory changes. Meanwhile, larger and stronger banks will be better placed to adapt, the ratings agency said.

“Abolition of credit growth quotas could result in banks growing aggressively, increasing credit risk in the economy. The concurrent transition toward Basel III capital requirements may be a mitigating factor,” S&P said.