Vietnam is pushing its banks to lend as never before to power the government's double-digit growth drive, even as the wreckage of the country's biggest-ever bank fraud sits unresolved on the system's books.

The State Bank of Vietnam (SBV) has told commercial lenders to keep credit growing at around 15% this year, and Fitch Ratings reckons they will overshoot that to roughly 18%, chasing an economy that expanded 8.2% in 1H26 but is being asked to hit 11.9% in 2H26 to lock in double-digit growth for the full year.

That is the crux of the risk. Vietnam runs one of the most credit-leveraged banking systems in the emerging world, with banking assets already worth more than 210% of GDP, and forcing loan books to grow faster still, when the last two credit booms ended in property and banking crises in 2012 and 2022, is a gamble on the state's ability to keep the machine from overheating.

“If Vietnam does achieve sustained 10% growth, it is more likely to be a warning sign than a reason for celebration, because it would suggest policymakers are willing to tolerate a further build-up in credit and financial vulnerabilities,” wrote Gareth Leather, senior Asia economist at Capital Economics, in an August note.

A system running hot

The credit taps are wide open. By the end of July outstanding loans reached nearly VND20.3 quadrillion, up almost 9% since the close of 2025, and the SBV has ordered banks to roll out preferential lending schemes at least a percentage point below normal rates. State giant Agribank alone launched a VND50 trillion ($1.9bn) discount programme for small firms, farming, semiconductors and green projects, one of four packages worth a combined VND210 trillion.

Lending is outrunning deposits, and that is where the strain shows. Rapid credit growth has tightened liquidity and squeezed net interest margins as the cost of funding rises, Fitch said. Cheap current-account money is draining away too: only six of 27 joint-stock banks lifted their CASA ratios in 1H26 as savers chased higher fixed-term rates, leaving lenders to refinance maturing deposits at steeper cost.

Vietcombank chairman Nguyen Thanh Tung has put the country's investment needs at around 40% of GDP to hit the growth target, against domestic savings of only about 36.5% – a gap banks cannot close alone, which is why Hanoi is being urged to tap overseas capital and deepen its bond market rather than lean on lenders indefinitely.

The bill nobody has paid

Hanging over all of it is Saigon Commercial Bank (SCB), the lender at the centre of the Van Thinh Phat affair. Property tycoon Truong My Lan was sentenced to death in 2024 for looting the bank in a fraud put at $27bn, equivalent to roughly 6% of Vietnam's GDP, and the SBV placed SCB under special control in October 2022.

Keeping it alive has been extraordinarily expensive. The central bank had pumped a cumulative $24bn of “special loans” into SCB by early 2024 to stem a deposit run, and is still piecing together a restructuring that leans on mandatory acquisitions and outside investors. None of that is resolved, and the cash keeps flowing.

It also distorts the headline numbers. S&P Global put the reported bad-debt ratio at around 4% at the end of 2024, but once loans parked at the state Vietnam Asset Management Company and restructured debt are added back, the SBV's own broader gauge has run above 6% – and neither figure fully captures the SCB hole. Banks have also struggled to offload seized property into a soft market, slowing the clean-up.

State giants, private challengers

For all that, the sector is highly profitable. Vietcombank, the country's most valuable and state-controlled, posted 2025 pre-tax profit of VND44 trillion ($1.7bn), just ahead of fellow state banks VietinBank on VND43.4 trillion and BIDV, the largest by assets, on VND37.9 trillion. Between them the three state majors cleared about VND125 trillion, far ahead of the rest.

The private field is closing the gap. Techcombank, the biggest joint-stock lender, made VND32.5 trillion and holds the sector's top CASA ratio at 34.26%; MB, or Military Bank, made VND34.3 trillion; and VPBank VND30.6 trillion. Mid-tier names including ACB, Sacombank, SHB, HDBank and TPBank fill out a crowded joint-stock pack, with HDBank on VND21.3 trillion and SHB VND15 trillion.

The read-across from ratings has been improving. S&P last year upgraded Vietcombank to 'BB+', Techcombank to 'BB' and Eximbank to 'BB-', lifting the country's banking-risk score a notch, and the agency singled out the state's readiness to backstop the system – as it did with SCB – as a key prop. Digital adoption is running hard alongside, with the big private banks folding lending and payments into slick apps to defend their deposit franchises. Beyond the banks, brokers such as SSI Securities and insurer Bao Viet round out a financial sector Hanoi wants to grow into a genuine capital-market alternative to bank credit.

Thin cushions, deep property links

The worry is what a lending sprint of this size does to already-thin defences. Capital buffers are modest by regional standards, Basel III has no firm adoption timetable, and much of the loan book is tied, directly or through collateral, to a property-and-corporate-bond complex that has twice blown up in a decade. Private-sector credit is worth well over 130% of GDP, and every extra point of growth adds to that stock.

Hanoi's bet is that fast growth, foreign investment and a deeper bond market will let the system grow out of its problems faster than the bad debt can catch up. The alternative – that the credit push inflates a third property bubble on top of an SCB clean-up that is nowhere near finished – is the scenario that keeps ratings analysts cautious even as the profits roll in. For now the banks are lending, the state is standing behind them, and the bill for the last crisis has still not been settled.