Credit growth forecast to be high this year

MB Securities Joint Stock Company (MBS) cited data from the State Bank of Vietnam (SBV) saying that as of October 30, outstanding credit balance of the entire system had increased by about 15% compared to the end of 2024 and is expected to continue to increase strongly to 19-20% by the end of this year.

In the regular press conference of the third quarter of 2025, the State Bank forecast that credit growth in 2025 could reach 19-20% to support economic growth. Credit growth was positive in the first three quarters of the year and is expected to continue to improve in the coming time, as the State Bank is on track to eliminate credit room from 2026.

The elimination of credit room helps to be more proactive in building annual credit growth plans, but bank leaders admit that building their own credit "room" forces banks to increase their responsibility to shareholders and management agencies in determining their own "safety points". Accordingly, determining credit room depends not only on capital potential, but also on each bank's risk management capacity.

Dr. Nguyen Quoc Hung, General Secretary of the Vietnam Banking Association, said that for a long time, credit limits have been considered a safe support for banks. In the future, when the credit room is removed, many banks may find it difficult to come up with an appropriate credit growth rate.

In recent years, credit risk management tools have developed strongly, from the construction of internal credit rating systems to the application of advanced management standards according to Basel II and Basel III. The State Bank of Vietnam has issued many regulations related to internal credit rating systems, most recently Circular No. 14/2025/TT-NHNN dated June 30, 2025 regulating capital safety ratios for commercial banks and foreign bank branches.

Circular No. 14/2025/TT-NHNN has issued regulations on capital buffers, including capital preservation buffers, countercyclical capital buffers and capital buffers for systemically important commercial banks. This is an important premise for the roadmap to eliminate the credit limit allocation mechanism.

In fact, achieving a 10% economic growth rate (i.e. double-digit growth) from 2026 onwards and maintaining that rate for 20 consecutive years until 2045 requires a huge amount of capital.

Dr. Nguyen Tu Anh, Director of Policy Research at VinUni University, said that to grow, many factors are needed, of which capital is an extremely important factor, along with factors such as labor, science , institutions, environment, etc. With the problem of 10% growth from now until 2030, that is 5 years from now, this is real growth. If we add about 3% inflation, the nominal growth will be about 13%.

To achieve this level, according to Dr. Tu Anh, credit growth normally has to exceed nominal GDP growth by about 3 percentage points. This level is quite safe, but if we take 2 percentage points, credit growth needs to reach about 15%/year from now until 2030. Thus, in the next 5 years, credit will have to double. At that time, the size of bank assets, equity, and other related factors will increase accordingly.

“The role of banks in the economy has always been the most important capital channel. Here, I would like to take a deeper look at Vietnam’s credit/GDP ratio, which is around 134%,” emphasized Mr. Quan Trong Thanh, Director of Analysis, Maybank Securities Vietnam.

According to economic and financial experts, in the short term, the driving force for lending will come from infrastructure and energy. In recent years, the scale of investment in these areas has been small, but in the next 5 years, according to the GDP growth plan of 10% and calculations by the Ministry of Finance , the total investment capital needed is about 1,400 billion USD, or an average of about 280 billion USD per year. Of which, foreign direct investment (FDI) capital is only 24-30 billion USD, the remaining more than 250 billion USD must come from the domestic sector.

However, Fitch Ratings warned that the rapid credit growth of Vietnamese banks is increasing risks in the system, especially when the Government plans to abolish the credit limit mechanism that has been applied for many years. The State Bank of Vietnam is building a roadmap to abolish annual credit limits for banks, starting from 2026. This is part of the effort to achieve the economic growth target of 8% this year and 10% per year for the next 5 years.

The State Bank has also directed credit institutions to focus capital on production and business, priority sectors and key growth drivers of the economy, while expanding consumer lending and strictly controlling credit in high-risk sectors.

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