Vietnam sets lower credit growth target for 2026

Credit growth reached about 19.1 percent by the end of 2025, equivalent to VND18.58 quadrillion (US$707 billion), according to the State Bank of Vietnam (SBV).

However, the central bank said such rapid expansion will not be repeated in 2026.

The SBV has set a credit growth target of around 15 percent for this year, signaling a more cautious policy stance as economic and financial risks increase.

In a recent directive to credit institutions, the SBV said it will continue applying a quota-based credit allocation mechanism similar to previous years.

Under the new framework, each bank's credit ceiling for 2026 will be calculated based on its 2024 rating score multiplied by 2.6 percent.

Bank ratings are determined by six criteria, including capital adequacy, asset quality, governance capacity, profitability, liquidity, and risk sensitivity.

Notably, the SBV said credit quotas will be assigned only once for the entire year of 2026, with compliance monitored on a quarterly basis.

Banks must ensure that total credit growth, including exchange rate adjustments, does not exceed the allocated quota.

Lenders are also required to limit credit expansion in the first three months of the year to no more than 25 percent of their annual quota, a measure aimed at ensuring lending growth remains aligned with funding capacity and liquidity conditions.

The central bank stressed that credit quality must be strictly controlled, particularly in the real estate sector.

Credit growth for property-related activities must not exceed each bank's overall credit growth rate in 2025.

The SBV warned it will reduce credit quotas for banks that fail to comply.

The announcement triggered an immediate reaction in the local stock market, with shares of several property developers falling sharply in the afternoon session on January 9.

Phat Dat Real Estate Development Corporation’s PDR shares dropped to the daily limit at VND17,250 ($0.65) each, while No Va Land Investment Group Corporation’s NVL shed 5.64 percent to VND12,550 ($0.5).

Development Investment Construction Joint Stock Corporation’s DIG shares declined 5.88 percent to VND16,000 ($0.6), and C.E.O Group JSC’s CEO shares slid 8.91 percent to VND18,400 ($0.7).

Economists said the tightening is necessary to maintain macroeconomic stability, control inflation, and safeguard key economic balances.

Quarterly monitoring of credit growth is also expected to prevent a repeat of 2025, when heavy lending early in the year left banks struggling to stay within limits later on.

According to an SBV survey, credit risks remain highest in real estate investment loans, followed by securities and import-export financing.

In its 2026 outlook, Ho Chi Minh City Securities Corporation warned that while high credit growth may support short-term GDP expansion, it raises concerns about the sustainability and quality of growth.

The report said credit should be redirected toward manufacturing, export-oriented industries, and high value-added services instead of fueling asset price inflation.

Despite regulatory efforts, a disproportionate share of credit continues to flow into real estate, pushing housing prices sharply higher in major cities.

Addressing a banking sector conference on December 31 last year, Prime Minister Pham Minh Chinh reiterated the need to maintain credit quotas and tighten controls over high-risk sectors, including real estate, to ensure credit quality.

Data from the SBV's regional branch overseeing Ho Chi Minh City and neighboring Dong Nai Province show that by the end of 2025, credit growth in the region outpaced deposit growth, underscoring liquidity pressures heading into 2026.