Bank

LDR Ratio Rebounds: Credit Recovery or Liquidity Strain?

The current landscape indicates that systemic liquidity remains stable. However, a cautious approach to management is imperative at this juncture to maintain financial safety margins and, more critically, to uphold the confidence of both the market and depositors.

Administrator

19 November, 2025

Credit Growth Outpaces Deposits

Data from VietstockFinance reveals that as of September 30, 2025, the total outstanding loans across 28 banks in the system exceeded VND 13,680 trillion, marking a 15% increase compared to the beginning of the year.

Among these, NCB (NVB) led with the highest credit growth at +33%, followed by VPBank (VPB, +29%), Techcombank (TCB, +21%), MB (MBB, +20%), TPBank (TPB, +18%), and Nam A Bank (NAB, +18%). Saigonbank (SGB) was the only bank with negative credit growth at -6%.

Total customer deposits across the 28 banks reached over VND 12,330 trillion, a 10% increase from the start of the year.

All banks in the system experienced deposit growth. ABB saw the strongest deposit inflow (+31%), followed by NVB (+24%), NAB (+22%), VPB (+21%), and MSB (+19%).

Customer Loans and Deposits as of September 30, 2025 (Unit: Billion VND)

Source: VietstockFinance

LDR Ratio Rebounds

With credit growing at 15% and deposits at 10%, the Loan-to-Deposit Ratio (LDR) across banks rebounded by the end of Q3. The average LDR for the 28 banks was 93.51%, a significant increase from 91.96% at the end of Q2 and higher than the 92.58% at the beginning of the year.

Only 9 out of 29 banks saw a decrease in their LDR compared to the start of the year, a sharp decline from 16 banks at the end of Q2, indicating stronger credit growth across the board.

As of September 30, 2025, 7 banks maintained an LDR below 85%. Four banks exceeded the 100% threshold: VPB (129.55%), VIB (111.24%), SeABank (SSB, 110.34%), and VietinBank (CTG, 101.68%).

LDR Ratios of Banks as of September 30, 2025

Source: VietstockFinance

Liquidity Pressure Mounts

Assoc. Prof. Dr. Nguyễn Hữu Huân – Senior Lecturer, University of Economics Ho Chi Minh City notes that the LDR in Q3 has risen compared to Q2 and the beginning of the year, potentially putting pressure on the banking system’s liquidity. This pressure is not only a concern but also a direct and fundamental reason for the recent increase in deposit interest rates, despite previous significant declines.

It’s essential to understand the nature of the LDR. This ratio measures the extent to which a bank uses deposits from individuals and businesses to lend. When the LDR increases, it means credit growth is outpacing deposit growth.

Banks lending more will undoubtedly strain their liquidity reserves. However, the most significant pressure doesn’t just come from inherent liquidity risks but also from regulatory requirements.

The State Bank of Vietnam (SBV) sets a maximum LDR threshold (85% for commercial banks) as a key operational safety metric. When a bank’s lending pushes its LDR close to this limit, it may need to slow down lending (which no bank wants as it reduces profits) or increase deposits to rebalance the ratio.

To boost deposits, especially in a highly competitive environment, the quickest and most effective tool is raising deposit interest rates to attract idle funds from individuals and businesses. Thus, the rising LDR has created pressure, forcing banks into a deposit rate hike race. This move not only provides banks with more capital for lending but also ensures compliance with capital safety and liquidity regulations.

Mr. Nguyễn Quang Huy – CEO of Finance and Banking Faculty, Nguyen Trai University believes the rebound in the LDR is a sign of credit recovery but also a reminder of the need for tighter liquidity management.

The LDR increase from 91.96% at the end of Q2 to 93.51% at the end of Q3 demonstrates that “the credit capital cycle has truly restarted.”

Previously, banks might have raised capital but struggled with lending (slow credit growth), leading to capital stagnation. The rising LDR indicates this capital is now being more effectively deployed into the economy. After a long period, loan demand from businesses and individuals is recovering.

However, Mr. Huy also highlights the challenges. As the LDR approaches 95%, liquidity pressure will undoubtedly emerge. This pressure may not be evenly distributed across the system immediately but will be “localized.” Some commercial banks, especially those that have aggressively lent in the recent quarter, will start feeling the strain on their capital and need to adjust to rebalance.

When this pressure arises, banks will be compelled to implement measures to ensure liquidity safety and regulatory compliance.

Enhancing deposits is the most fundamental solution. Banks will need to intensify capital mobilization, particularly medium and long-term funds (which are more stable) to match long-term loans, often leading to higher deposit rates.

Banks will also be more active in issuing securities (certificates of deposit, bonds, etc.) to raise capital from the secondary market.

In the short term, banks will need to flexibly utilize the interbank market (borrowing from each other) and open market operations (OMO) support from the SBV to address immediate liquidity shortfalls.

According to Mr. Huy, the overall picture shows the system’s liquidity remains stable. Nonetheless, cautious management is crucial at this juncture to maintain financial safety margins and, more importantly, uphold market and depositor confidence.

Cát Lam

– 10:00 19/11/2025