Behind the heated race to boost charter capital lies mounting pressure to meet new capital adequacy ratio standards, comply with international financial reporting standards (IFRS), and expand credit-growth capacity in the years ahead

A capital-raising race In just a short period, numerous banks have announced plans to raise charter capital ranging from several trillion to tens of trillions of Vietnam dong (VND). The total charter capital of 28 banks as of November 2025 has exceeded VND926 trillion, up nearly 16% compared with the end of 2024 — underscoring an intensifying race to bolster capital across the system. Saigon – Hanoi Commercial Joint Stock Bank (SHB) plans to add VND7.5 trillion in charter capital in 2025, raising its total to over VND53 trillion as it targets a spot among the four largest joint-stock banks by capital. This comes right after SHB completed a VND9 trillion capital increase in September, signaling a bold expansion strategy. HDBank is also joining the race. The bank has approved a plan to raise more than VND11.5 trillion, mostly through stock dividends and bonus shares issued from owners’ equity. The number of new shares equals roughly 30% of the current outstanding volume. VietinBank was recently approved by the State Bank of Vietnam (SBV) to issue nearly 2.4 billion shares as stock dividends, with implementation scheduled between Q4 2025 and Q1 2026. After completion, VietinBank’s charter capital would jump from around VND53.7 trillion to approximately VND77.7 trillion. BIDV and Vietcombank are also in the race. BIDV plans to issue 2.16 billion shares to add more than VND21.6 trillion to its capital, pushing total charter capital close to VND92 trillion. Vietcombank intends to privately place nearly 550 million shares, adding around VND5.4 trillion and targeting nearly VND89 trillion in charter capital. These figures show banks majority held by the State are accelerating expansion while strengthening competitiveness against fast-growing private banks. Sacombank is also returning to the “track” after about a decade of restructuring. It plans to issue roughly 343 million new shares — more than VND3.4 trillion — raising charter capital from nearly VND19 trillion to almost VND22.3 trillion. Many others, including ABBank, TPBank, and SaigonBank, seek increases ranging from several hundred billion to several thousand billion VND. In total, as of November 2025, the 28 banks’ charter capital had surpassed VND926 trillion — nearly 16% higher than late 2024. Analysts expect the capital-raising race to intensify further as it becomes a crucial, even existential, requirement for scaling operations and ensuring systemic safety. Raising capital for survival Under Vietnam’s Banking Sector Development Strategy and related regulations, commercial banks must raise their capital adequacy ratios (CAR) to at least 10–11% by 2025, approaching international standards. In addition, Circular 14/2025/TT-NHNN on capital-adequacy ratios — which aligns more closely with Basel III requirements — took effect on September 15, 2025, adding further pressure on banks to raise capital. Another driver is Vietnam’s roadmap for adopting international financial reporting standards (IFRS). Under Decision 345/QD-BTC (March 16, 2020), from 2026, listed enterprises, parent companies in corporate groups, and large public-interest entities must apply IFRS. Unlike VAS, IFRS uses the forward-looking expected credit loss (ECL) model, requiring banks to strengthen capital buffers to better absorb risks. More importantly, raising capital directly enhances banks’ ability to expand credit. With credit growth expected to reach 18–20% this year and likely remain around 20% in 2026 to support the 10% GDP-growth target, CAR could be eroded if banks fail to scale up capital in time. Notably, from 2026 the SBV may remove credit-growth ceilings, enabling banks to lend even more aggressively. Meanwhile, many banks’ loan-to-deposit ratios (LDR) already exceed safe thresholds, as deposit growth — both across the system and at individual banks — has not kept pace with rising credit in recent years. In this context, raising charter capital becomes essential to compensate for deposit shortfalls. Deposit interest rates have recently begun rising again, intensifying competition for funding. At the same time, bond issuance — another important funding channel — has become more challenging. Higher funding costs have compressed net interest margins (NIM) this year, weakening profitability. This further motivates banks to increase Tier-1 capital (i.e., charter capital) to reduce funding costs. For smaller banks, capital adequacy ratios have dropped close to the minimum 8% threshold, while bad debts continue to rise. Without raising capital, they may face tighter lending limits. As a result, 2026 is becoming a “must-raise-capital year,” especially for banks that delayed capital increases during 2023–2024 and are now forced to sprint to catch up. How banks are raising capital Banks are primarily using stock-based measures: stock dividends, bonus-share issuances, rights offerings for existing shareholders and employees, and private placements to foreign strategic investors. Several banks have recently begun seeking strategic partners. Banks are also speeding up the sale of bad debts and collateral assets to recover capital and may divest stakes in subsidiaries. Favorable stock-market conditions would support these efforts, but recent market volatility, corrections, and weak liquidity may complicate share issuance plans. On the other hand, aggressive capital increases may dilute share value, posing risks for investors.