Vietnamese banks are having to pay more than 9% on a growing share of new bonds even as regulators order them to cut lending and deposit rates, a squeeze that could pressure margins and profit growth across the sector.
Vietnamese banks face higher bond funding costs
The mismatch is the most important development for investors: funding costs are rising just as the State Bank of Vietnam pushes credit institutions to lower borrowing rates by 1.5 to 2 percentage points a year for manufacturing, business and priority sectors. That creates a direct hit to net interest margins if asset yields do not reprice fast enough.
Sentiment Indicators
S&I Ratings said the average bank bond coupon reached 8.85% in the third quarter, above the 2022 peak of 8.7% and ahead of the 8.5% average in the first half. In other words, the cost of wholesale funding is not just elevated — it is moving to new highs even after the central bank’s repeated calls for cheaper credit.
The pressure is already showing up in fresh issuance. PVcomBank sold bonds at 10.5%, while issuers paying above 9% included Nam A Bank, LPBank, Sacombank, HDBank and MBBank. ACB also lifted its rate, underscoring how broad the repricing has become among private lenders.
PVcomBank raised VND200 billion ($7.73 million) at 10.5% on Sept. 17, due in 2036, and added another VND4.08 trillion at 9.6% in September and October, mostly in floating-rate paper. Sacombank raised VND7.83 trillion over the same period at 9.4% to 9.5%, after earlier selling three six-year tranches totaling VND4.23 trillion at 10%.
Nam A Bank sold VND595 billion at 9.6% to 9.7%, while LPBank priced four tranches worth VND600 billion at 9.68%, alongside a larger VND1.5 trillion deal at 9.2%. MBBank’s September coupons of 9% to 9.2% were up sharply from 8.1% in July, while HDBank moved to 9.2% from 8.9% and ACB to 8.5% from 8%.
State-owned lenders remain cheaper, with Vietcombank keeping coupons near 8% and BIDV at 8% to 8.2%, highlighting a widening funding-cost gap between state-backed banks and private peers. That split matters because the more expensive bond market financing may force private banks to either absorb lower spreads or compete harder on loans and deposits.
SSI Securities expects sector margins to keep narrowing and profit growth to slow in 2027 if funding costs continue to outpace yields. For investors, the key near-term catalyst is whether banks can pass on costs through loan pricing without violating the central bank’s rate-cut mandate.
| Entity | Gains | Losses |
|---|---|---|
| Borrowers in priority sectors | ▲Cheaper lending rates | ▼Banks’ pricing power |
| State-owned lenders | ▲Lower funding costs | ▼Smaller yield advantage for private banks |
| Private Vietnamese banks | ▲Access to capital markets | ▼Net interest margins |
| Bank bond investors | ▲Higher coupon income | ▼Credit and duration risk |
