Lenders turn to bond market to strengthen capital base

Lenders turn to bond market to strengthen capital base

Vietnamese banks are stepping up bond issuance plans worth billions of dollars to replenish capital sources, support lending growth and secure long-term funding amid rising financing demand across the economy.

A series of banks are preparing to issue large volumes of bonds. Notably, state-controlled banks are expected to mobilise billions of US dollars through this channel.

Specifically, Agribank has approved a resolution on its 2026 public bond issuance plan. Under the plan, the bank will issue up to 150 million bonds with a face value of VND100,000 ($4) each, raising a maximum of approximately $600 million.

The bonds will have a 10-year maturity and carry floating interest rates calculated as the reference rate plus a margin, with interest paid annually. The offering is expected to take place during the second and third quarters (Q2 and Q3) of 2026.

BIDV plans to raise approximately $1.6 billion through bond issuance in 2026

The proceeds from the bond issuance will be used to increase tier-2 capital which strengthens banks' capital buffers and ensure compliance with prudential ratios prescribed by the central bank, while supporting lending in the economy, particularly medium- and long-term projects in agriculture, forestry and fisheries, transportation, warehousing, and construction.

Earlier, the Board of Directors of Vietcombank approved a plan to issue up to $400 million of bonds through private placements to expand tier-2 capital sources.

The bonds will have a face value of VND1 billion ($40,000) each, maturities of five years or longer, and may be issued in up to 30 tranches.

The issuance aims to supplement tier-2 capital, thereby strengthening the bank's financial capacity and supporting its growth requirements in the coming years.

At BIDV, the bank's Board of Directors issued two resolutions in late April approving plans to raise up to $1.64 billion through bond issuance. Of this amount, BIDV will issue approximately $840 million to expand tier-2 capital sources.

The bonds will have maturities of more than five years and will be distributed in up to 50 tranches, each with a minimum value of $2 million. The issuance is scheduled for Q2 to Q4 of 2026.

In addition, BIDV's Board of Directors issued a private placement of bonds worth up to around $800 million to supplement lending for customers across the economy.

The bonds will have maturities ranging from two to five years and will be offered in up to 30 tranches, each with a minimum value of $2 million. Distribution is scheduled from Q2 to Q4 of 2026, while the proceeds will be disbursed progressively from Q2 of 2026 to Q2 of 2027.

Among private joint-stock commercial banks, MB recently completed a major bond issuance, closing 10 bond tranches to raise approximately $240 million within one month, with interest rates ranging from 8.3 per cent to 8.4 per cent, per year.

OCB also completed three bond issuances in late April, raising around $120 million, with the highest interest rate reaching 8.6 per cent, per year.

Most recently, the Board of Directors of HDBank approved the first tranche of a private bond issuance in 2026 with a total maximum face value of approximately $600 million.

Sacombank has also approved a private bond issuance plan and the use of proceeds from the offering in 2026, with a maximum value of around $800 million. The bank has yet to disclose detailed information on issuances, including bond maturities, interest rates, issuance schedules and eligible investors.

As of the end of Q1/2026, Sacombank's outstanding value of issued debt securities stood at about $1.53 billion, down approximately $40.8 million, or 2.6 per cent, from the outset of the year.

Earlier, in March, VPBank issued a private bond issuance programme for this year with a maximum total value of approximately $1.2 billion.

Vietnam's corporate bond market has witnessed a strong return by banks during the first months of 2026. According to data from the Vietnam Bond Market Association, banks offered around $2.4 billion worth of bonds during the first five months of the year.

In May alone, bond issuance reached approximately $1.3 billion, accounting for more than half of the total volume issued since the beginning of the year.

Analysts said that as deposit growth remains sluggish and access to funding in the interbank market faces certain constraints, bonds have become one of the most important channels for banks to supplement their capital.

Dr. Chau Dinh Linh of Ho Chi Minh City University of Banking said, besides meeting liquidity needs, many bank bonds – particularly long-term bonds that satisfy regulatory requirements – can also be counted as tier-2 capital.

This provides banks with greater room to improve their capital adequacy ratios, strengthen financial capacity and expand business operations, especially amid intensifying competition for funding.

“This is also one of the reasons why bond issuance is expected to remain vibrant in the second half of 2026, with many banks having announced plans to raise tens of, and in some cases hundreds of millions US dollars through the bond market,” he said.

VIR