Major bank BIDV halts new real estate loans as Vietnam tightens credit controls

Vietnam’s major lender BIDV (HoSE: BID) has suspended new loans to real estate projects, moving to curb credit flows into the property sector in line with regulatory efforts to contain financial risks.

In a notice issued on Wednesday, the state-controlled bank said it had instructed branches to temporarily stop submitting new real estate project proposals and property business plans from corporate clients to head office, pending further guidance.

The move follows directives from the State Bank of Vietnam, or the central bank, which has asked lenders to ensure that real estate credit growth in 2026 does not exceed overall system-wide loan expansion.

BIDV is one of Vietnam’s four state-controlled commercial banks, known as the “Big Four” alongside Vietcombank, VietinBank and Agribank. The bank has recently raised interest rates on new home loans for individual borrowers, in some cases matching or exceeding rates offered by private-sector lenders.

A senior executive at one state-controlled bank said authorities have capped this year’s credit growth allocation for real estate, prompting lenders to use higher interest rates as a tool to steer capital away from property and toward more productive sectors of the economy.

According to the central bank, total outstanding loans across Vietnam’s economy rose more than 19% last year to VND18.58 quadrillion ($715.31 billion). Credit linked to real estate stood at about VND2 quadrillion ($77 billion), data from the Ministry of Construction showed.

Analysts said the sharp rebound in property lending in 2025 reflected capital returning to the market after a prolonged downturn. However, the pace and scale of the increase have raised concerns about financial stability, particularly as market liquidity has yet to fully recover.

If credit continues to concentrate in speculative segments, risks of capital misallocation and rising bad debts could resurface, analysts warned.

Economists argue tighter controls are needed to prioritize lending for genuine housing demand, social housing, and sustainable urban development, while reallocating capital toward manufacturing, high-tech industries, and green investment to support longer-term economic growth.