Higher 2026 growth target puts pressure on credit framework

Higher 2026 growth target puts pressure on credit framework

Vietnam’s credit growth framework is set to face mounting pressure as policymakers pursue a significantly higher economic growth target in 2026.

Speaking to VIR, a senior executive of state lender BIDV said Vietnam’s economic growth target for 2026 is being raised to 10 per cent, as stipulated in Resolution No.244/2025/QH15 of the National Assembly.

“The first growth impulse comes from domestic drivers, with public investment playing a leading role. Disbursement is planned to surge by 40 per cent compared to 2025, reaching approximately $44 billion, channelling into a series of key infrastructure projects such as the Long Thanh International Airport, the North–South Expressway, or the Lao Cai–Hanoi–Haiphong railway projects,” the executive said.

The higher target is expected to place additional demands on credit expansion, with public investment, corporate lending, and bank-level differentiation shaping the outlook.

Meanwhile, the private sector is expected to accelerate thanks to reform mechanisms, the rollout of international financial centres, expansion into new areas such as AI and digital assets, and the possibility of foreign funding attraction for project execution.

"Consumption is also forecast to improve as changes to the Personal Income Tax Law increase disposable income," the BIDV executive added.

For local firms, particularly household businesses – a segment that accounts for a large share of the economy but has long faced barriers to credit access – the move towards looser credit caps in 2026 is expected to create clearer headroom for growth.

Several banks have already introduced more flexible financial solutions for this segment. MSB, for example, is offering loan limits of up to around $2 million for household businesses, alongside simplified appraisal processes that prioritise assessments based on actual cash flows and transaction history rather than traditional financial statements.

This approach is expected to help ease upfront investment cost pressures and enables household businesses to secure capital to upgrade equipment, sustain operations, and pursue expansion plans in 2026, signalling a broader shift in credit towards real economic activity.

Tran Thi Khanh Hien, head of research at MB Securities (MBS), expects credit growth in 2026 to remain at around 20 per cent to support the 10 per cent GDP growth target.

“The main drivers include continued acceleration of public investment and improved credit for small- and medium-sized enterprises (SME), as the Purchasing Managers’ Index has risen sustainably since last April, reaching 53.8 points in November. As the tariff outlook becomes clearer, rising new orders are expected to pull SME credit out of its postponement phase,” she said.

By contrast, according to Hien, mortgage lending is likely to slow as lending rates rise in line with deposit rates, while capital flows are prioritised for production, business activities, and public investment.

Credit growth among listed banks in 2026 is forecast to be broadly in line with 2025, with more intense competitive pressure on smaller banks, while corporate lending continues to lead overall growth.

Hien noted that banks with loan portfolios dominated by corporate clients are likely to benefit, as credit is expected to remain concentrated in this segment.

“These are banks whose loan portfolios are led by corporate clients, as credit will continue to be concentrated mainly in this segment. In addition, banks with advantages in funding costs – such as state-owned banks or those with high current account savings account ratios like Techcombank and MB Bank – will have an edge. Furthermore, capabilities in project financing and supply chain finance will also be advantageous, given expectations of stronger demand,” she said.

According to analysts at Vietcombank Securities (VCBS), credit growth in 2026 could reach 16–18 per cent, exceeding the State Bank of Vietnam’s (SBV) current target.

VCBS attributed the outlook to an accommodative monetary policy environment, with low policy rates continuing to stimulate credit demand. Key growth momentum is expected to come from public investment, real estate, and the private economy, while credit demand is forecast to recover more broadly, particularly in consumer lending and longer-tenor home loans.

Public investment is set to remain a key driver of economic growth, while progress in resolving legal bottlenecks in the real estate sector is expected to generate spillover effects for construction and building materials.

By banking group, VCBS forecast that dynamic private banks will lead credit growth, exceeding 20 per cent, while large banks involved in mandatory transfers are expected to continue benefiting from preferential mechanisms that allow higher-than-average credit caps.

In a scenario where the SBV gradually abolishes the credit cap mechanism, banks with high capital adequacy ratios such as VPBank, Techcombank, and HDBank are likely to have an advantage in expanding credit. At the same time, banks focusing on priority sectors including agriculture, retail, SMEs, and social housing are also expected to gain additional room for growth.

VIR