Fortifying the capital buffer

Recently, the Prime Minister issued Decision No. 1206/QD-TTg authorising the policy of increasing Agribank’s charter capital during the 2025–2027 period. The total additional capital amounts to 29.69 trillion VND, equivalent to the remaining profits actually remitted to the State budget during this period. Under the decision, Agribank will receive 9.525 trillion VND from the central budget in 2026 pursuant to Resolution No. 246/QH15 of the National Assembly, followed by a further 20.165 trillion VND in 2027. With its current charter capital standing at 51.638 trillion VND, Agribank’s capital will rise to 81.328 trillion VND once the plan is completed.

The capital injection is particularly significant as Agribank plays a leading role in financing agriculture, farmers, and rural areas. As of June 30, the bank’s total assets exceeded 2.7 quadrillion VND, deposits surpassed 2.5 quadrillion VND, and outstanding loans to the economy exceeded 2 quadrillion VND. Lending to the “three agricultural sectors” — agriculture, farmers and rural areas — alone exceeded 1.32 quadrillion VND, accounting for 64.9% of total outstanding loans. The additional resources will enable Agribank to maintain capital adequacy ratios, gradually meet enhanced Basel II and Basel III requirements, and increase its capacity to invest in technology, strengthen governance, and promote green and sustainable growth.

Data from the State Bank of Viet Nam show that as of July 13, total credit outstanding in the economy had reached nearly 20.1 quadrillion VND, up 7.86% from the end of 2025. In just over the first half of 2026, the banking system pumped an additional 1.46 quadrillion VND to the economy, helping support production and business activity as GDP grew by 8.18% in the first six months of the year, the highest rate recorded during the 2011–2026 period.

The faster credit grows, the greater the requirement for banks’ own capital. Under Basel II and Basel III, increases in risk-weighted assets and outstanding loans must be accompanied by corresponding increases in shareholders’ equity to maintain mandatory capital adequacy ratios. Without timely capital increases, banks’ room for credit expansion will narrow, even as demand for capital remains substantial.

Against the backdrop of record GDP growth in Viet Nam and strong demand for capital to support production and business, the banking system has embarked on an unprecedented race to raise capital. According to FiinGroup, listed banks are expected to raise around 128 trillion VND in equity capital in 2026, a more than sevenfold increase over the previous year’s figure and 71.6% above the average of the past five years. Techcombank is at the centre of this race, with plans to increase its capital from around 70.8 trillion VND to 113.7 trillion VND through a 60% bonus share issue and an ESOP. VPBank plans to raise its capital to around 106.2 trillion VND, while MB is targeting a maximum of 102.687 trillion VND. If completed, these will be the first banks to surpass 100 trillion VND in charter capital.

Among State-owned commercial banks, BIDV is also targeting charter capital of 99.558 trillion VND in 2026. Vietcombank currently has more than 83.5 trillion VND in charter capital and plans to raise a further 10.68 trillion VND; VietinBank will maintain its capital at 77.67 trillion VND while continuing to consider options for increasing capital from retained earnings. The capital-raising wave is also engulfing mid-sized banks such as MSB, OCB, and SeABank.

Asset quality serves as the differentiator

BIDV Chief Economist Dr Can Van Luc said the 2026 capital-raising race is not simply about scale, but about preparing for a new growth cycle in which capital quality, risk management, and digital transformation will dictate the competitive standing of individual banks.

Nevertheless, rapid capital growth also creates pressure to maintain returns and control the risk of share dilution. Capital increases therefore only have real significance when asset quality and the efficiency of capital allocation improve at the same time.

According to the report “The banking sector ahead of the race for quality growth,” published by Viet Nam Report in June 2026, asset quality remains a key focus of development strategies. Experts at Yuanta Securities Viet Nam Limited Company also said this would be a critical differentiator among banks, alongside credit growth. Credit institutions that maintain a reasonable non-performing loan ratio and an adequate provision buffer will have an advantage in controlling credit costs and increasing profits. Conversely, banks that must devote substantial resources to provisioning will face greater pressure.

Tran Minh Binh, Chairman of the Board of Directors of VietinBank, said the bank would continue to prioritise improving credit quality and maintaining its provision buffer. By the end of the first quarter of 2026, the non-performing loan ratio had been contained at 1.02%, while the bad-debt coverage ratio stood at 167.2%, providing room to respond to risks in subsequent periods.

For banks undergoing restructuring, capital increases are also a condition for resolving legacy issues and cleaning up their balance sheets. After nearly five years of implementing its restructuring plan, NCB Bank has achieved its capital-raising target three years ahead of schedule, bringing its charter capital to 29.28 trillion VND. During the 2021–2025 period, the bank dealt with and recovered more than 41.4 trillion VND in bad debts and outstanding assets. According to General Director Ta Kieu Hung, the additional capital is not intended to expand the bank’s scale at any cost, but rather to prioritise addressing outstanding issues and strengthening its financial foundations.

This demonstrates that capital increases and improvements in asset quality must be executed in tandem. In the period ahead, banks’ development focus will no longer be on expanding credit at all costs, but on improving the quality of growth. Capital will continue to be prioritised for production, exports, infrastructure, logistics, digital transformation, green transition, and businesses with transparent financial foundations.

At the same time, investment in risk management, the use of big data and artificial intelligence to identify and provide early warnings of risks, and improvements to mechanisms for handling collateral will contribute to better asset quality. These are the true measures of a bank’s financial health and standing, as well as the foundation for the banking system to meet the economy’s capital needs while maintaining safe and sustainable development over the long term.