The government last Tuesday issued Decree 316/2026/ND-CP, amending and supplementing Decree 135/2025/ND-CP on financial management for credit institutions and foreign bank branches and on financial supervision and performance assessment of state capital investments in credit institutions.

One of the notable changes is the increase in the proportion of profits that credit institutions wholly owned by the state and credit institutions with state capital can allocate to their development investment funds.

From October 1, 2026, banks will be allowed to allocate up to 40% of their remaining profits to the fund, compared with a maximum of 20% under Decree 135.

The development investment fund is used to finance development investment projects and increase charter capital. The higher allocation therefore goes beyond a change in profit distribution, directly expanding banks' internal resources to strengthen their capital base.

The move comes as demand for capital in the economy continues to rise rapidly, while the banking system remains the main channel for providing funds. According to the State Bank of Vietnam (SBV), as of July 29, total system-wide credit had exceeded VND20,150 trillion ($770.6 billion), up 8.38% from the end of 2025. The SBV said it would continue to conduct monetary policy flexibly, maintain liquidity, and improve access to capital.

Greater capacity to accumulate capital from profits could therefore help state-owned banks strengthen their financial position and provide a foundation for credit growth in the coming years. In particular, as capital adequacy requirements become increasingly stringent, raising charter capital from internal resources would give banks more room to expand their balance sheets without relying entirely on additional budget funding or share issuance.

Several measures to improve access to capital

The changes to the financial framework for banks with state capital come as the SBV is implementing a range of measures to expand the supply of credit to the economy.

The SBV on August 7, 2026 issued Document No. 7125/NHNN-TD, calling for the implementation of a credit program targeting economic growth drivers and small and medium-sized enterprises. The initiative is aimed at directing bank funding towards sectors identified as having a key role in supporting growth.

Earlier, from July 1, 2026, new regulations on prudential limits and ratios in banking operations raised the maximum share of short-term funds that can be used for medium- and long-term lending to 40%, from a lower level previously. The change gives banks greater room to meet demand for medium- and long-term financing, particularly in sectors requiring large amounts of capital and longer investment payback periods.

The SBV has also adjusted the treatment of part of the State Treasury's term deposits in calculating the loan-to-deposit ratio (LDR), in a move aimed at creating additional room for bank lending. The new rules apply from August 1, 2026, through the end of July 2028, helping make more effective use of deposits within the banking system.

Notably, at a meeting with the SBV and the credit institution system last Thursday, Prime Minister Le Minh Hung called for credit growth in 2026 to remain aligned with the year's target, while stressing that the target should not be treated as a "hard ceiling" at all times. Credit policy should be implemented proactively and flexibly in response to actual developments, ensuring that funding reaches the right sectors, at the right time, and for the right borrowers, at reasonable cost.

Alongside expanding the supply of capital, the government is also seeking to reduce funding costs and bring lending rates down in real terms. The Prime Minister asked credit institutions to continue cutting costs, stabilising interest rates and directing capital towards sectors that drive economic growth.

With credit growing rapidly and demand for financing to support ambitious growth targets remaining high, strengthening banks' capital bases, expanding lending capacity, and managing the flow of credit flexibly have become key priorities of monetary policy.

For banks with state capital, allowing them to retain a larger share of profits for charter capital is expected to provide an additional financial buffer, supporting further credit expansion while maintaining the safety requirements of the banking system.

Vietnam's government has set a target of 11.9% economic growth in the second half of 2026 to achieve its goal of expanding GDP by at least 10% for the full year, according to a government resolution issued on Saturday.

The target was outlined in Resolution 168, which updates the country's growth scenario and sets out key policy measures for the remainder of the year while maintaining macroeconomic stability.

On April 24, the National Assembly - the country's legislature - set a 2026-2030 agenda targeting at least 10% average annual GDP growth.