Vietnam Central Bank Warns of $76.8 Billion Loan-Deposit Gap, Heightened Systemic Risk
The State Bank of Vietnam warns that the balance of bank loans exceeds deposits by approximately $76.8 billion, with capital demand surpassing banks' fundraising capacity. The government simultaneously calls for expanded credit to support high growth targets, raising concerns that this imbalance could impact liquidity, interest rates, and the stability of the financial system.
The report from the State Bank of Vietnam indicates that the balance of loans in Vietnamese dong exceeds deposits by about 20 trillion dong (approximately $76.8 billion). While the government promotes credit to support double-digit growth targets, banks are struggling to mobilize funds.
Credit growth continues to outpace deposit growth, increasing the loan-deposit ratio and exacerbating liquidity pressures. Some banks face rising fundraising costs and interest rate competition.
Regulators have adjusted some prudential ratios to release lending space but emphasize the need to balance growth and stability.
From a market mechanism perspective, event-driven funding gaps may lead to rising deposit rates and tightening credit conditions, directing funds toward high-priority growth areas. Beneficiaries are priority sectors receiving policy support, while small and medium-sized enterprises and highly leveraged borrowers relying on bank credit face pressure.
Source: Public Information
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The Vietnamese economy heavily relies on bank credit to drive growth, with credit expansion consistently outpacing deposit mobilization in recent years, resulting in a structural funding gap. The central bank seeks to balance supporting the government's high growth targets with maintaining financial stability, having previously released space through measures such as adjusting loan-deposit ratio calculations and short-term funding usage limits.
On the capital front, the government demands expanded credit to support infrastructure and key projects, while banks face limits on their fundraising capacity, motivated by the need to sustain economic growth momentum. Strategically, they temporarily alleviate the issue through policy tools but have not fundamentally resolved the deposit shortfall.
Similar cases can be observed in other emerging markets experiencing loan-deposit imbalances and liquidity pressures during rapid growth periods, as well as Vietnam's previous experiences with credit quota management, currently navigating a phase of high growth targets alongside constraints on bank balance sheets.
The structural assessment indicates regulatory changes: the tension between policy-driven credit expansion and market fundraising capacity is testing the resilience of the financial system. The mechanism involves maintaining liquidity through regulatory easing in the short term, while long-term recovery relies on deposit growth and capital replenishment to restore balance.
ABAB News · Cognitive Law
Growth targets test banks' fundraising limits
Loan-deposit gap heightens systemic risk
Policy easing struggles to address structural imbalance