Bond Spotlight March 2025: Will Banks lead Corporate bond market growth?

As the Vietnamese Government and the State Bank mandate low deposit interest rates to stimulate economic growth, the corporate bond market is expected to expand significantly, particularly for bank-issued bonds. This trend is illustrated in Charts 02 and 17 of this March’s Bond Market Spotlight publication.

As the Vietnamese Government and the State Bank mandate low deposit interest rates to stimulate economic growth, the corporate bond market is expected to expand significantly, particularly for bank-issued bonds. This trend is illustrated in Charts 02 and 17 of this March’s Bond Market Spotlight publication. 

Access March’s full version of Bond Spotlight here: THIS LINK

Deposit interest rates remained stable to support economic growth 

Figure 02: Change in average deposit interest rates compared to the previous month.

Source: FiinRatings. Note: Data compiled from 12-month term deposit rates of 30 commercial banks 

Through Chart 2, it is evident that deposit interest rates at banks have remained stable without any sharp increases, only experiencing slight fluctuations. By the end of February, the State Bank's average deposit interest rate for terms over 12 months remained at 5.4%, while the average rate among the 20 largest banks hovered around 4.95%. On February 24, 2025, Prime Minister Phạm Minh Chính issued an official directive instructing the State Bank to implement stronger measures to reduce interest rates. 

According to updated data from February 25 to March 18, 2025, a total of 23 commercial banks have adjusted their deposit interest rates, reducing them by 0.1% to 1% per year, depending on the term. These moves reflect the Government's commitment to keeping capital costs low, thereby enabling businesses to access more affordable financing. 

Bond Market Outlook: Banks Leading a 15–20% Growth 

Figure 17: Corporate Bond Market – Total Outstanding Debt.

Source: FiinRatings. 

Vietnam has set a 16% credit growth target for this year to achieve an 8% economic growth rate. With low deposit interest rates and reduced borrowing costs, credit demand is expected to rise. In this environment, banks are projected to issue bonds aggressively, accounting for a significant share of the corporate bond market’s outstanding debt. 

We forecast the bond market to grow by 15% - 20%, driven primarily by banks. The issuance plan from now until the end of 2025 includes seven enterprises, with more than half of them being banks. Notably, at the end of March, LPBank and Kienlong Bank are set to issue 7,000 billion VND and 800 billion VND, respectively. 

Additionally, as of March 26, 2025, the total principal and interest payments due for non-bank enterprises amount to 200.4 trillion VND, reflecting significant refinancing pressure, especially in capital-intensive sectors such as real estate, energy, construction, and materials. The real estate sector alone accounts for 59.7% of maturities. 

To maintain liquidity, businesses must seek debt restructuring solutions. During this process, banks will play a crucial role, helping enterprises access lower-cost capital, thereby contributing to financial market stability and growth. 

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About FiinRatings 
FiinRatings, a member of FiinGroup and technical partner of S&P Global Ratings, is a licensed credit rating agency under Vietnam’s Ministry of Finance. Our services include credit ratings, green bond verification, and independent evaluations (Second Party Opinion - SPO), catering to issuers, lenders, and investors across diverse sectors in Vietnam. 

FiinRatings’ SPO services provide independent evaluations of financial instruments, policy frameworks, or transactions aligned with principles set by global institutions like the International Capital Market Association (ICMA) and the Climate Bonds Initiative (CBI). Notably, FiinRatings is the first approved verifier for CBI Climate Bond Standards in Vietnam. 

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