Vietnam banking system faces liquidity squeeze amid rapid credit growth

Vietnam's banking sector is under mounting liquidity pressure as credit growth outpaces deposit mobilisation. By the end of May 2026, total credit expanded 5.71% year‑to‑date while deposits grew only 2.98%, widening the credit‑deposit gap to more than 2.5 million billion VND and pushing the loan‑to‑deposit ratio (LDR) to about 115%. The mismatch has driven interbank rates up to nearly 20% per annum on overnight loans and raised household deposit rates to 8‑9% for 6‑12‑month terms. The State Bank of Vietnam has urged banks to curb credit expansion in real‑estate and other long‑term loans to ease the strain.

At the same time, Vietnam’s broader economy shows resilience: the government’s 2027 budget plan targets a 13‑15% rise in domestic revenue, while exports of textiles reached $18.8 billion, a 5.6% increase, and foreign direct investment continues to flow into electronics, high‑tech, data‑centre and smart‑manufacturing sectors. Nonetheless, the liquidity squeeze poses a risk to credit‑dependent industries and could dampen growth if not addressed.