Fitch says Vietnam banks likely to face significant pressure from government growth target

Fitch says Vietnam banks likely to face significant pressure from government growth target HANOI, Aug 6 : Fitch Ratings said on Thursday that Vietnam's banking system is likely to come under under significant pressure to finance and support the economy due to government efforts to attain double-digit growth in 2026. Banks in Vietnam remain more vulnerable to external shocks than their neighbours, Fitch Ratings said in a statement. • Vietnam reported GDP growth of 8.18 per cent in the first half of this year, and second-quarter growth would have to reach at least 11.9 per cent to meet the government's target. • Fitch Ratings projects that system loans will grow by about 18 per cent in 2026, higher than the central bank's guidance of 15 per cent, with banks still eager to expand. • Rapid credit growth has continued to outpace deposit growth, resulting in tightening liquidity and narrower net interest margins, it said. • "This suggests domestic banks' ability to meet the high credit demand of businesses and individuals is coming under increasing strain," it said. • Fitch Ratings expects Vietnam's GDP to rise by 6.8 per cent in 2026 and 6.7 per cent in 2027, with the infrastructure sector one of the key drivers of growth. • The country raised its target for infrastructure investment to 7 per cent of GDP last year to support its ambitious double digit economic growth targets, it said. [Image text:] DAN QIAU NUCC MON REUTERS