The State Bank of Vietnam (SBV) has not yet announced a credit expansion for commercial banks, even though many have already used nearly all of their credit growth room for 2025 by the end of the third quarter.

In previous years, the SBV often allowed a credit room increase in October or November, but this year the latest adjustment came at the end of July.

Without further credit expansion from the SBV, supply has tightened in the fourth quarter, following a strong surge of nearly 14 per cent in the first nine months of the year, with many banks having already fully utilised their allocated credit.

For example, OCB is awaiting a credit expansion after almost reaching the 13-14 per cent credit room assigned at the start of the year. By the end of the third quarter, OCB’s outstanding loans exceeded VNĐ200 trillion, up 13.7 per cent from the beginning of 2025.

Currently, only a few banks that undertook mandatory transfers of weak banks and received a credit expansion as a reward from the SBV may still have abundant lending capacity.

Analysts at Việt Dragon Capital Securities (VDSC) note that the SBV’s decision not to loosen credit during the peak disbursement period reflects a more cautious monetary management approach. This policy aims to stabilise interest rates while the banking system’s liquidity shows signs of tightening, as many large banks’ loan-to-deposit ratios (LDR) approach the regulated cap of 85 per cent by the end of the third quarter. It also helps ease pressure on the USD/VNĐ exchange rate in the final months of the year.

Although the SBV could consider expanding credit if the US Federal Reserve cuts interest rates at its December 9-10 meeting, analysts say it remains more likely that the SBV will maintain a cautious stance until the end of 2025.

In previous years, when the SBV did not strictly control capital flows, fourth-quarter credit growth could rise 5-6 per cent quarterly. This year, the indicator is expected to fall below that baseline.

VDSC analysts believe that banks will focus on optimising their allocated credit in the last quarter, with total banking industry credit growth expected to reach about 18.2 per cent, surpassing the 16 per cent target.

They forecast that the banking sector will continue to enjoy strong profit growth in Q4 of this year thanks to credit growth above 18 per cent and a projected net interest margin (NIM) increase of 10 basis points from the previous quarter, despite persistent liquidity pressures and rising capital costs. — VNS

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