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Credit growth slows, slips in first half of October

Credit growth slows, slips in first half of October

Credit growth across Vietnam’s banking system eased from 11.59% at the end of September to 11.44% as of October 14, indicating that lending momentum has stalled and even edged down in the short term.

Meanwhile, the State Bank of Vietnam (SBV) continues to urge banks to cut both deposit and lending rates.

Credit growth sees short-term reversal

According to information released by SBV Governor Pham Duc An at a meeting on Monday, outstanding credit to the economy reached VND20,720 trillion ($800.73 billion) as of October 14, up 11.44% from the end of 2025 and 16.73% year-on-year.

The figure was lower than the 11.59% credit growth previously reported by the SBV. Earlier in October, the central bank said system-wide outstanding credit had reached around VND20,750 trillion ($801.89 billion) as of September 30, up 11.59% from the end of 2025 and 16.69% year-on-year.

This means credit growth since the beginning of the year had fallen by around 0.15 percentage points in just the first half of October.

The development is noteworthy as Vietnam pursues an ambitious economic growth target, which is expected to drive strong demand for capital for production, business activities and investment.

Alongside the credit slowdown, pressure to cut interest rates is mounting. On October 19, the SBV held a meeting with credit institutions chaired by Governor Pham Duc An, following the issuance of Official Letter No. 9608/NHNN-CSTT on measures concerning credit institutions’ operations.

At the meeting, the governor stressed that banks must simultaneously cut operating costs, share profits and reduce funding costs to deliver meaningful lending-rate reductions. Deposit rates are a key component of funding costs; if banks continue to raise them, their room to lower lending rates will be limited.

Under the SBV’s requirements, credit institutions must initially cut listed deposit rates by at least 0.5 percentage points per year for maturities of six months or longer. They must also avoid competing to raise deposit rates in ways that create unfair competition and destabilize the money market. At the same time, banks must introduce measures to cut lending rates by 1.5-2 percentage points per year for production, business activities and priority sectors.

Notably, rate cuts are not intended to be applied uniformly. Banks must target the appropriate borrowers and extend reductions to both existing loans and new lending. The SBV also requires tighter control over credit flowing into potentially risky sectors and warns banks against lowering lending standards to pursue credit growth.

The latest directive follows several rounds of calls for lower interest rates since the beginning of the year. It also signals that regulators want to translate general instructions into more concrete action on both the funding and lending sides.

SBV has called for rate cuts six times

Since the beginning of 2026, the government and the SBV have repeatedly urged the banking system to lower interest rates. Key milestones include Directive 01/CT-NHNN issued early in the year; a meeting with 46 commercial banks on April 9; corrective and follow-up directives in May; further instructions on interest-rate support and credit in subsequent months; and the latest call on October 18. In total, the SBV has called on banks to cut interest rates six times this year.

Following the latest directive, the market has seen concrete responses in both deposit and lending rates. Among state-owned commercial banks, BIDV has launched a short-term dong lending program with rates starting at 6% per year, up to 2 percentage points below its usual rates, depending on loan maturity and sector.

Vietcombank has pledged to cut lending rates by at least 2 percentage points per year from now until the end of the year.

Agribank also launched a program on October 19 to cut lending rates by up to 2 percentage points per year, with around VND2 trillion ($77.27 million) earmarked to support customers.

Among joint-stock commercial banks, LPBank and VietBank were among the first to adjust their listed deposit rates on Monday.

LPBank cut rates by 0.5 percentage points per year for maturities of six to 12 months and by 0.6 percentage points for maturities of 13 to 18 months. Notably, it also reduced rates by 1.6-2 percentage points per year on newly disbursed short-term loans for production and business activities.

VietBank cut deposit rates by 0.5 percentage points per year for maturities of six to 36 months.

The market has also reported that ACB would adjust its deposit rate schedule from Tuesday. The specific reductions should be checked against the bank’s official rate schedule before publication.

These moves suggest that regulatory instructions are beginning to translate into concrete programs. However, the maximum reductions announced under individual programs do not mean that all customers will receive equivalent cuts in their borrowing rates.

Assessing the outlook for the remainder of 2026, brokerage VNDirect said interest rates were likely to remain relatively stable through the end of the year, with more pronounced declines from early 2027 as external pressures ease. The forecast reflects constraints from inflationary pressures, strong demand for capital and the possibility of further U.S. interest-rate increases.

Funding pressures are also making rate cuts difficult to implement evenly across the banking system. According to Bao Viet Securities (BVSC), deposit growth remains below credit growth, continuing to put pressure on banks’ funding. As a result, the SBV’s rate-cut directives may first affect preferential lending programs and listed deposit rates. For borrowing costs to decline sustainably across the broader market, however, banks will still need to improve deposit mobilization and liquidity management.


Source: Dinh Vu, Thai Ha

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Vietnam holds 71 billion-ton CO2 storage potential, unlocking CCUS opportunities in oil and gas

Vietnam holds 71 billion-ton CO2 storage potential, unlocking CCUS opportunities in oil and gas

Vietnam is considered a country with immense potential to develop CCS and CCUS across its petroleum industry, especially via offshore carbon geological storage

Carbon capture and storage (CCS), as well as carbon capture, utilization, and storage (CCUS) technologies, are increasingly recognized as vital pathways in emissions reduction—particularly for hard-to-abate industrial sectors.

Vietnam is considered a country with immense potential to develop CCS and CCUS across its petroleum industry, especially via offshore carbon geological storage. According to assessments, the country possesses among the greatest CO2 storage capacities in Southeast Asia, with a potential of up to 71 billion tonnes of CO2 concentrated primarily across three geological regions…

Speaking at the workshop "Carbon Capture, Utilization, and Storage (CCUS) Technologies: Solutions to Accelerate Net Zero in Vietnam" on October 27, Dr. Nguyen Huu Luong, Senior Expert at the Vietnam Petroleum Institute, noted that current global operational CCUS capacity remains relatively modest, with approximately 64 million tonnes of CO2 being captured.

However, global CCS deployment is forecast to expand rapidly, surging nearly tenfold by 2030 to surpass 500 million tonnes per year.

Globally, there are 77 CCUS projects in commercial operation and 610 under various stages of development, with an anticipated average compound growth rate of nearly 40% through 2030. Key geological formations utilized worldwide for CO2 storage include depleted oil and gas reservoirs, deep saline aquifers, and unminable deep coal seams.

To date, cumulative global injected and stored CO2 stands at around 380 million tonnes.

"This is an extremely modest figure against a theoretical global capacity exceeding 10 trillion tonnes of CO2, demonstrating enormous headroom for growth in this sector," Dr. Luong said.

The International Energy Agency (IEA) has concluded that reaching Net Zero emissions by 2050—moved forward from the previous 2070 horizon—will require an additional 50% expansion in CCUS deployment. In 2023, the IEA also underscored CCUS as an indispensable, mandatory component to achieve Net Zero targets.

For Vietnam, joint research conducted by Petrovietnam (PVN) and the Japan Organization for Metals and Energy Security (JOGMEC) identified Vietnam as possessing among the highest CO2 storage potentials in Southeast Asia, estimated at approximately 71 billion tonnes. This storage capacity is concentrated primarily in three offshore sedimentary basins: the Song Hong Basin (39 billion tonnes), the Nam Con Son Basin (22 billion tonnes), and the Cuu Long Basin (10 billion tonnes). Crucially, Vietnam could capitalize on over 1 billion tonnes of effective storage capacity within depleted oil and gas fields alone.

Vietnam also holds distinct competitive advantages for CCUS, including 34 offshore oil and gas fields whose storage suitability has been preliminarily evaluated by Petrovietnam. Notably, in 2011, Vietnam became the first nation in Southeast Asia to successfully implement CO2 enhanced oil recovery (EOR) injection at the Rang Dong field.

CCUS scope in Vietnam’s decarbonization roadmap

Addressing the workshop, Deputy Minister of Agriculture and Environment Le Trong Yen emphasized that achieving Vietnam’s Net Zero emissions commitment by 2050 necessitates profound transformation across economic growth models—particularly as Vietnam targets ambitious double-digit GDP expansion—as well as production methods and natural resource utilization.

According to the Deputy Minister, this transition must run parallel with ensuring national energy security, ecological integrity, and industrial competitiveness while creating fresh development impetus. Every mitigation solution must be evaluated on scientific rigor, economic feasibility, and Vietnam’s unique practical conditions.

To lay the groundwork for real-world deployment, Mr. Yen called for clearly defining the specific role, positioning, and application scope of CCUS within Vietnam's national decarbonization roadmap. Concurrently, technical standards, scientific benchmarks, and safety protocols across the entire CCUS value chain must be thoroughly clarified.

Industry specialists noted that Vietnam has already established baseline prerequisites for CCUS development. The country possesses concentrated point-source CO2 emissions from power generation and heavy industries, vast offshore geological storage capacity in sedimentary basins and depleted fields, and mature oil and gas expertise, seismic data, and infrastructure that can be repurposed for CO2 transport, injection, and long-term storage.

Furthermore, the gradual emergence of a domestic carbon market, green finance frameworks, and legal improvements governing petroleum operations provide foundational momentum for CCUS execution.

Most notably, the amended Petroleum Law (Law No 10/2026/QH16), adopted by the National Assembly on August 23, 2026, and taking effect on March 1, 2027, introduced specific legal provisions governing carbon capture and storage operations linked to petroleum activities, establishing an initial regulatory cornerstone for field deployment.

Dr. Nguyen Thanh Tung, Deputy Director of the Vietnam Petroleum Institute, assessed that incorporating CCUS provisions into the revised Petroleum Law is a decisive milestone, providing the legal basis to transition from exploratory research toward commercial projects.

However, Dr. Tung stressed that to commercialize CCS/CCUS on an industrial scale, Vietnam must establish comprehensive guidelines covering the full project lifecycle: acreage block awards, investor selection, site characterization, injection licensing, operational monitoring, site closure, and post-closure long-term liability frameworks.

From an international perspective, delegates concluded that under appropriate market conditions, CCS/CCUS provides critical decarbonization pathways for hard-to-abate industries, spurs technological innovation, and enhances the export competitiveness of low-carbon goods. The degree to which mitigation credits are monetized on carbon markets will ultimately hinge on robust legal architectures, baseline carbon accounting methodologies, and stringent measurement, reporting, and verification (MRV) protocols.


Vietnam needs integrated solutions to accelerate clean energy transition: experts

Vietnam needs integrated solutions to accelerate clean energy transition: experts

Vietnam’s favourable conditions for expanding clean energy sources, however, the energy transition still faces significant challenges.

Vietnam’s solar and wind power capacity has expanded significantly, with the two sources accounting for approximately 19% and 7% of the country’s electricity mix, respectively, in 2025, according to Ms. Nguyen Thi Thu Huyen of the Institute of Energy under the Ministry of Industry and Trade.

Speaking at the recent “Clean Energy for a New Era of Growth” forum, Ms. Huyen said the figures highlighted the increasingly important role of renewable energy in Vietnam’s power sector.

Vietnam has favourable conditions for expanding clean energy sources, including onshore and offshore wind, rooftop solar, biomass and emerging energy technologies. Under power development planning scenarios, solar power capacity could reach hundreds of thousands of megawatts, while offshore wind capacity could exceed 100,000MW by 2050.

However, the energy transition faces significant challenges. Growing electricity demand from data centres, artificial intelligence and electrified transport requires reliable, stable and affordable power supplies. Meanwhile, the existing transmission grid, dispatch capabilities and energy storage infrastructure have yet to keep pace with these demands.

Experts at the forum proposed a range of long-term solutions. Dr Vo Tri Thanh, Director of the Institute for Brand and Competitiveness Strategy Research, stressed that the transition to clean energy must follow a roadmap suited to Vietnam’s economic development. Adjustments to power planning should take into account implementation capacity, access to partners and the ability to master technology.

He also highlighted the need for coordinated efforts to address policy and regulatory challenges, mobilise investment, develop energy infrastructure, strengthen technological capabilities and train highly skilled workers.

Dr Mai Duy Thien, Chairman of the Vietnam Clean Energy Association, said expanding clean energy required more than simply increasing power generation capacity. Instead, a comprehensive approach was needed, integrating planning, transmission, distribution, demand-side management and financing.


Vietnamese exporters face dual challenge over power supply

Vietnamese exporters face dual challenge over power supply

Ensuring an adequate power supply remains critical as Vietnam's manufacturing and exports expand rapidly. However, some companies in global supply chains must also meet requirements on renewable electricity use and emissions. A draft amendment to Vietnam’s Electricity Law, now under consideration by the National Assembly, seeks to refine mechanisms to address these needs.

On October 20, at a working session of the National Assembly, the country's legislature, Minister of Industry and Trade Le Manh Hung presented a proposal to amend and supplement several provisions of the Electricity Law. The draft focuses on resolving bottlenecks in power generation and grid investment, while refining the framework for direct power purchase agreements (DPPAs) and renewable energy certificates.

The proposals come as businesses’ electricity needs evolve. National Assembly member Trinh Tu Anh, representing Lam Dong province, said many companies, particularly those participating in international supply chains, need not only reliable electricity at competitive prices but also proof of energy origin, renewable electricity usage, and emissions generated during production.

This presents the power sector with two parallel challenges: ensuring sufficient electricity to support economic growth and enabling businesses to access clean power and verify its use to meet customer requirements.

Reliable power supply remains an immediate priority

Vietnam’s manufacturing and export activities continued to expand strongly in the first nine months of 2026. Merchandise exports reached $434.3 billion, up 24.5% from a year earlier, according to the National Statistics Office. Industrial production rose 12.3%, while manufacturing and processing output increased 12.9%.

The expansion in manufacturing has been accompanied by a substantial rise in electricity demand.

The Ministry of Industry and Trade reported that commercial electricity consumption nationwide reached 237.19 billion kilowatt-hours (kWh) in the first nine months, up 9.66% year-on-year. Industry and construction accounted for 122.18 billion kWh, an increase of 8.32%, representing around 51.5% of total electricity sales.

Accounting for more than half of consumption, industry and construction remain the largest electricity-consuming sectors. For factories, a stable power supply is essential to keep production lines running, operate equipment and meet delivery schedules.

The ministry said the power system operated safely and reliably during the nine-month period, meeting demand from businesses and households. Maintaining supply over the longer term, however, will require coordinated development of generation capacity, transmission networks and grid dispatch capabilities.

According to Vietnam Electricity (EVN), total electricity generated and imported across the system reached 265.79 billion kWh in the first nine months. Coal-fired power contributed 132.63 billion kWh, or 49.9%, while hydropower generated 68.48 billion kWh, or 25.8%. Renewable energy sources, as classified by EVN, supplied 33.6 billion kWh, accounting for 12.6%. Gas-fired power contributed 20.48 billion kWh, while electricity imports totalled 10.3 billion kWh.

Hydropower output fell nearly 9% from a year earlier amid hydrological conditions affected by the El Niño phenomenon.

By contrast, coal- and gas-fired power together increased their share of total generation and imports to 57.6%, from 53.9% a year earlier, despite growth in other renewable energy sources. The shift towards a greater share of fossil fuels adds pressure to greenhouse gas emissions at a time when environmental requirements are becoming increasingly linked to manufacturing and export activities.

At the "Clean Energy for a New Era of Growth" forum held in Hanoi on October 27, Mai Duy Thien, chairman of the Vietnam Clean Energy Association, stressed the need to consider energy development in the context of economic growth and national competitiveness.

Clean energy development would not only help diversify supply but also enable businesses to adapt to increasingly stringent environmental standards, he said. This highlights the need to address energy security and the transition to cleaner electricity in parallel.

Clean electricity becomes a gateway to global supply chains

Renewable electricity requirements are already being incorporated into the supply-chain policies of multinational corporations, rather than remaining a trend expected to emerge in the future.

According to its 2026 Environmental Progress Report, Apple has incorporated a requirement for 100% renewable electricity into its Supplier Code of Conduct. The company requires its direct manufacturing supply chain to use 100% renewable electricity for Apple-related production by 2030.

According to the U.S. technology company, electricity consumption at supplier factories is the largest source of greenhouse gas emissions across its supply chain. Switching to renewable power is therefore a key component of its 2030 carbon neutrality goal.

Environmental requirements are also being considered as part of trade policy. In the United States, the proposed Clean Competition Act, introduced in Congress in December 2025, would establish a carbon border adjustment mechanism based on the emissions intensity of goods.

Meanwhile, the European Union entered the definitive phase of its Carbon Border Adjustment Mechanism (CBAM) on January 1, 2026, with the purchase and surrender of CBAM certificates scheduled to follow a phased timeline beginning in 2027. The mechanism covers products in six sectors: iron and steel, aluminium, cement, fertilizers, electricity and hydrogen.

Under the scheme, EU importers must fulfil obligations linked to emissions embedded in covered goods. Carbon costs could affect purchasing prices and the competitiveness of foreign producers, making emissions management an economic consideration as well as an environmental responsibility for businesses.

In Vietnam, demand for renewable electricity has already translated into actual transactions.

On June 1, 2026, Samsung Electronics Vietnam Thai Nguyen (SEVT) announced that it had implemented a direct power purchase agreement through the national grid, becoming the first corporate customer to complete a transaction under the DPPA mechanism.

The electricity supplied under the agreement comes from the TTC Duc Hue 2 solar power plant in Tay Ninh province, with expected output of around 70 million kWh a year.

The government established the DPPA framework under Decree 57/2025/ND-CP, which was subsequently amended and supplemented by Decree 243/2026/ND-CP. Current regulations have expanded participation to eligible electricity retailers operating in qualifying industrial and economic zones, creating additional arrangements for industrial customers to purchase renewable electricity.

Samsung’s case demonstrates that demand for renewable power has moved beyond commitments to actual transactions. It also raises questions about how the DPPA mechanism can be expanded to give more manufacturers access to clean electricity.

However, transactions conducted through the national grid require participants to account for network usage, dispatch, reserve capacity and other system services. How these costs are calculated and allocated directly affects companies’ overall electricity bills, as well as the interests of customers that do not participate in DPPAs.

This was among the issues the National Assembly’s Committee on Science, Technology and Environment called for clarification in its appraisal report on the draft Electricity Law amendments on October 20. The committee said DPPA participants should fulfil their cost obligations in full to prevent unreasonable cost transfers to other customers.

Beyond access to renewable electricity, businesses also need tools to verify the environmental attributes of the power they consume. Renewable energy certificates (RECs) serve this purpose, but their trading and use require reliable registration, verification and traceability mechanisms.

The draft amendments seek to establish a more complete legal framework for the REC market. The appraisal committee has called for clear rules on certificate ownership, trading and cancellation after use to prevent the same environmental attributes from being claimed more than once.

The issues under consideration therefore go beyond expanding the right to purchase renewable electricity. They also concern the overall cost of transactions and businesses’ ability to demonstrate that they use clean power - conditions that matter to companies seeking to meet environmental commitments made to international partners.

Reuters recently reported that the U.S.-China tariff war had helped accelerate the relocation of manufacturing to Vietnam. The expansion of export-oriented production has brought rising electricity demand. However, Reuters warned that the high share of coal-fired power in Vietnam’s electricity mix could pose an emissions challenge as international buyers increasingly scrutinize the carbon footprints of their supply chains.

For domestic companies seeking deeper integration into global supply chains, the ability to secure reliable electricity, manage emissions and meet partners’ environmental standards is likely to become increasingly important. These factors could increasingly influence the competitiveness of Vietnamese businesses as environmental requirements across global supply chains become more stringent.

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