The SBV recently issued Circular No. 23/2025/TT-NHNN, amending and supplementing several provisions of Circular No. 30/2019/TT-NHNN on mandatory reserve requirements for credit institutions and foreign bank branches.

Under the new regulation, credit institutions must hold a 3% mandatory reserve for non-term and under-12-month deposits, and 1% for deposits with terms exceeding 12 months.

However, starting October 1, banks involved in mandatory acquisitions of weaker institutions will enjoy a 50% reduction in reserve requirements. This benefits major banks like Vietcombank (VCB), MBBank (MBB), VPBank (VPB), and HDBank (HDB), which have taken over struggling banks.

These banks hold substantial current account savings (CASA), with some exceeding 550 trillion VND (approximately USD 21.7 billion). At the current 3% reserve rate, they must retain about 16.5 trillion VND (USD 651 million). A 50% reduction would free up 8.25 trillion VND (USD 325.5 million) for lending.

At Vietcombank alone, long-term deposits exceed 1.2 quadrillion VND (USD 47.4 billion). At a 1% reserve rate, the bank must set aside 12 trillion VND (USD 474 million). A 50% reduction would release an additional 6 trillion VND (USD 237 million).

Stock market riding high on strong liquidity

All four banks mentioned above possess high CASA ratios and massive mobilization capabilities. As a result, several billion USD in additional liquidity will be available for lending and economic stimulation.

Vietnam’s stock market has seen robust growth recently, fueled by strong economic performance expectations, solid corporate and banking results, low deposit/lending rates, high credit growth, and the prospect of a market upgrade.

Securities firms have also ramped up lending. As of the end of Q2, the top 40 firms reported combined outstanding securities loans of about 285 trillion VND (USD 11.25 billion). Across the entire system, margin lending and pre-funding are estimated to exceed 300 trillion VND (USD 11.4 billion) - a record high.

The increased lending capacity of commercial banks supports not only the real economy but also creates positive spillovers into the stock market.

Luu Chi Khang, Director of Research at CSI Securities, commented that the reserve requirement cut is very positive news for the market. The immediate beneficiaries are securities stocks, followed by construction and real estate equities.

Regarding market outlook, Mr. Khang expects the uptrend to continue in the long run. CSI forecasts the VN-Index could reach 1,720 points in this bull cycle.

However, in the short term, he cautions against making firm predictions, as the VN-Index has recently surged and may face sudden corrections due to profit-taking pressure.

Mr. Khang advised investors not to chase prices near the 1,620–1,625 point range and instead consider reducing their exposure.

Recently, many institutions have issued bullish forecasts. Maybank Investment Bank raised its 2025 market-wide earnings growth projection to 18.5% and presented a positive scenario in which the VN-Index could rise to 1,800 points.

In Q2, Maybank reported a 34% year-over-year profit increase for the stock market, thanks to robust growth across most sectors. The shipping logistics sector stood out. Domestically, industries tied to infrastructure investment - such as steel and real estate - benefited from government policy boosts.

At the opening of the August 14 trading session, the market continued to climb. By 9:33 a.m., the VN-Index had risen by 10.65 points to 1,622.25. Liquidity on HoSE reached nearly 8 trillion VND (USD 316 million). MBBank shares hit the ceiling, rising by 1,800 VND to 27,600 VND (USD 1.09) per share. Vietcombank gained 1,100 VND, reaching 63,600 VND (USD 2.52) per share.

Manh Ha