According to data compiled by The Investor, total private placement bond issuance in May reached more than VND45.67 trillion dong ($1.73 billion), with credit institutions accounting for VND27.81 trillion ($1.06 billion), or 60.9% of the total.

Real estate companies ranked second with VND15.18 trillion ($576.4 million), representing 33.2% of issuance, followed by energy firms with over VND2.1 trillion ($79.85 million), or 4.6%.

The banking sector's return to the top spot came after real estate developers led the market for two consecutive months.

Military Commercial Joint Stock Bank (HoSE: MB) emerged as the largest issuer during the month, raising VND5.75 trillion ($218.3 million) through seven bond tranches with 10-year maturities. The bonds carried coupon rates of 8.2%-8.3%.

The issuance attracted attention because the 120-month bonds were priced below many shorter-dated bank bonds with maturities of two to three years, which typically offer yields of around 8.4%-8.6%.

For banks, the most common bond maturities were 36 months and 120 months, with an average coupon rate of 8.45%. Real estate issuers primarily offered three-year bonds with average yields of 12.49%, while energy-sector bonds carried yields of around 10.7% for maturities of 12 and 48 months..

Nguyen The Minh, head of investment banking at ABS Securities, said the resurgence in bank bond issuance was expected as lenders increasingly sought alternative funding channels.

"Over the past two years, the interbank market has played an important role in providing liquidity. However, by the second half of 2025, fundraising through traditional channels became more challenging while credit growth remained strong, forcing banks to seek alternative sources of capital. Bond issuance has therefore become a necessary option," Minh told The Investor.

He said bond yields are unlikely to fall below deposit rates of comparable maturities, particularly for medium- and long-term debt, where issuers need to offer attractive returns to investors.

Banks are also under pressure to secure longer-term funding as regulations limit the use of short-term deposits for medium- and long-term lending, he added.

At the same time, many lenders are pursuing capital-raising plans to strengthen their financial positions and comply with increasingly demanding capital adequacy standards.

Vietnam's banking system has already implemented Basel II requirements and is working toward Basel III adoption by 2030, a process that will require banks to increase capital buffers and maintain stronger liquidity ratios.

Regarding offshore fundraising, Minh said prospects for international bond issuance could improve later this year.

International borrowing costs remain elevated as the U.S. Federal Reserve has yet to deliver substantial interest-rate cuts. Exchange-rate volatility and hedging expenses have also made overseas issuance relatively costly, leaving domestic bonds as the primary funding channel for Vietnamese banks in the near term.

"Conditions could become more favorable from the fourth quarter of 2026 if the Fed continues to cut interest rates," Minh said. "At the same time, the Vietnamese government is actively working to improve the country's sovereign credit rating, which could support access to international capital markets."