In early October 2022, local media reported higher-than-usual customer deposit withdrawals at Saigon Commercial Bank (SCB) — the fifth-largest commercial bank in terms of deposits and assets in the Vietnamese banking system. Also in this period, the chairwoman of unlisted real estate developer Van Thinh Phat (VTPhat) was reported by the local media to be arrested due to allegations of fraudulent activities in issuing and trading corporate bonds. These events have raised concerns over the banking system’s liquidity and credit risk. 

Regarding system liquidity, the State Bank of Vietnam (SBV) and SCB have reported it to be under control as the number of customers coming to SCB’s branches have returned to a normal level and new customer deposits have increased day by day. We believe that SCB should be able to cope with renewed urgent liquidity needs without creating a major impact on the overall banking system liquidity thanks to the support from the SBV and its sizable Government bond holdings as of Q2 2022. In addition, SCB was a relatively small net borrower in the interbank market as of Q2 2022 of around VND2tn.

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