Rising borrowing costs put corporate balance sheets under pressure

Rising borrowing costs put corporate balance sheets under pressure

Total borrowings reached around VNĐ1.9 quadrillion (US$73.1 billion) at the end of the second quarter, up more than 10 per cent from the end of 2025.

A Long Chau Pharmacy store of FPT Retail. — Photo frt.vn

Borrowings among more than 600 listed non-financial companies increased sharply in the first half of 2026, as Vietnamese businesses faced a higher cost of capital and growing pressure to generate sufficient cash flow to service their debts.

Data from Vietstock Finance covering 636 non-financial companies listed on Việt Nam's two stock exchanges showed their total borrowings reached around VNĐ1.9 quadrillion (US$73.1 billion) at the end of the second quarter, up more than 10 per cent from the end of 2025. The statistics exclude banks, securities firms, insurers and other financial institutions, and cover companies with positive equity at both reporting dates.

Of the 522 companies carrying debt at the end of 2025, 294 increased their borrowings by June 30. As many as 151 companies raised outstanding debt by at least 20 per cent.

The increase was highly concentrated among large borrowers. 

The ten companies recording the biggest increases accounted for around 87 per cent of the net rise. Vinhomes (VHM) alone added approximately VNĐ69.19 trillion in borrowings, representing nearly 40 per cent of the VNĐ174.9 trillion net increase.

Liquidity indicators also showed pressure at a large number of companies. Among 510 businesses included in the relevant statistics, 324 had combined cash and short-term financial investments below their short-term borrowings as of June 30.

Cost of capital moves higher

The increase in corporate debt comes as funding costs have risen considerably.

State Bank of Vietnam (SBV) data showed banking-system liquidity had become less strained recently. By September 3, system-wide deposits had increased 8.33 per cent from the beginning of 2026, compared with credit growth of 9.98 per cent. In August alone, deposits grew 0.99 per cent, nearly five times the 0.2 per cent expansion in credit.

Corporate bond issuers have continued to raise substantial capital, but at higher costs.

According to MBS Research, the average market-wide bond interest rate reached around 9.5 per cent per year in the first seven months, more than two percentage points above the approximately 7.3 per cent recorded in 2025.

VIS Rating data for August put average bank bond rates at around 8.7 per cent, while average property bond rates stood at approximately 12.2 per cent.

As a result, companies increasing leverage are facing different capital requirements.

At Hoa Phat Group, total borrowings and finance lease liabilities reached approximately VNĐ98.53 trillion as of June 30, including around VNĐ71.43 trillion in short-term loans. 

The increase mainly reflected additional working-capital requirements as steel production expanded. The company generated around VNĐ12.64 trillion in operating cash flow during the first half.

FPT Retail, meanwhile, reported nearly VNĐ15.88 trillion in borrowings at the end of the second quarter. Its quarterly financial statements showed substantial additional cash being channelled into inventories while the retailer continued expanding operations.

Funding costs were particularly visible at Ho Chi Minh City Infrastructure Investment, whose reviewed consolidated half-year financial statements showed interest expenses approaching VNĐ1 trillion. 

During the period, the company received VNĐ8.43 trillion from borrowing and investment cooperation while repaying nearly VNĐ2.98 trillion in principal.

A Long Chau Pharmacy store of FPT Retail. — Photo frt.vn

Novaland reported VNĐ72.91 trillion in outstanding principal on loans and bonds at the end of the second quarter, of which VNĐ16.72 trillion was already due but remained unpaid.

The developer has sold four assets worth a combined VNĐ11.27 trillion under a VNĐ15.62 trillion asset-disposal plan designed to generate funds for debt repayment. From July 1 to the approval of its half-year financial statements, Novaland repaid another VNĐ2.42 trillion in principal. Its auditor, however, continued to emphasise factors related to the company's ability to continue as a going concern.

Novaland is also implementing a plan to offer additional shares to existing shareholders, with its board clarifying the intended use of proceeds in August. The fundraising remains under implementation and has yet to provide capital to the company’s balance sheet.

Phat Dat Real Estate Development Corporation had approximately VNĐ5.25 trillion in borrowings at the end of the second quarter, down around 5 per cent from end-2025, although first-half operating cash flow remained negative at approximately VNĐ2.82 trillion.

The company plans to offer up to nearly 199.6 million shares at VNĐ10,000 each, targeting proceeds of almost VNĐ2 trillion. Under its revised July plan, more than VNĐ101 billion would be allocated to principal repayment.

Viconship is similarly planning an offering of around 187 million shares to existing shareholders, expected to raise approximately VNĐ1.87 trillion. Of this, VNĐ1.58 trillion, or around 84.5 per cent, is earmarked for principal and interest payments, while VNĐ290 billion would be invested in Hải An Green Shipping for a container vessel.

Viconship's total borrowings stood at approximately VNĐ6.5 trillion at the end of June, up around 21 per cent from the end of 2025.

The figures come as listed companies balance interest-bearing debt, principal repayment and refinancing requirements against equity fundraising, which can dilute existing shareholders. 

Meanwhile, recent VN-Index movements and liquidity ahead of Việt Nam's official emerging-market upgrade have continued to reflect cautious trading and differentiation among listed companies. 

Bizhub