Vietnam enforces 8% capital adequacy ratio for banks from Sept 15

Commercial banks and foreign bank branches in Vietnam must maintain a minimum capital adequacy ratio (CAR) of 8%, including at least 4.5% in Tier 1 core capital and 6% in Tier 1 capital, starting from September 15.

The requirement is set out in Circular No. 14/2025/TT-NHNN issued by the State Bank of Vietnam, which also obliges banks with subsidiaries to comply with consolidated CAR standards in addition to individual ones.

The circular further stipulates that cash dividend payments are permitted only when banks have fully met the new capital requirements, pushing lenders to reinforce their capital base before profit distribution.

In anticipation, many banks have recently moved to raise charter capital through share issuances, profit retention, or issuing eligible debt instruments to bolster Tier 2 capital.

As of the end of June, financial statements from 29 banks showed total charter capital of the sector at VND879.35 trillion ($33.3 billion), up 6.6% from the end of 2024.

The five largest banks, Vietcombank, VPBank, Techcombank, BIDV, and MB, accounted for 41% of the total.