🥖 Credit pace, EU rules, Intel

Good afternoon,

Welcome back to Bánh Mì Brief! Your weekly report where Vietnam’s business buzz always packs extra crunch!

This week, credit growth sprinted so far ahead of deposits that bankers are feeling the burn, with rates rising and the year-end liquidity chase getting spicy. Meanwhile, exporters are keeping a blind eye on EU supply chain rules, and Intel is doubling down on its tech gamble in the country.

Enjoy the read!

Vietnam’s credit system is playing an intense game of musical chairs. Credit growth has sprinted to 10.08% as of October 31, leaving deposit expansion gasping at just 4.79%, creating a liquidity pressure cooker that’s forcing banks into a competitive frenzy. Thirteen lenders have already cranked up deposit rates in recent weeks, with the elusive 6% per year rate making a dramatic comeback at smaller players like ABBank, IVB, BacABank. Agribank, the state-owned heavyweight, has doubled down with two rate hikes, now offering 2.9% for 3-5 month deposits versus competitors’ 2.3%, signalling nobody’s sitting on the sidelines.

The central bank’s recent liquidity injection, cutting reserve ratios by 50% for Vietcombank, MB, VPBank, and HDBank effective October 1, was meant to ease pressure, but it’s more like applying a bandage to a growing wound. Those four banks are expected to unlock VND 17.2-51.7 trillion in freed-up capital, with Vietcombank alone potentially releasing VND 7.9-23.8 trillion. Yet even this flood of new liquidity can’t stop the year-end sprint, where businesses ramp up production and capital demand reaches fever pitch.

For businesses hunting loans and savers seeking better returns, it’s a mixed bag. While competition for deposits means higher yields for patient capital holders, rising lending costs squeeze margins for borrowers. The big wildcard: whether the SBV will hold lending rates steady to support the economy or let the market rip. Either way, Vietnam’s banking system is showing signs of strain that’ll keep everyone watching the scoreboard through year-end.

Nearly 60% of Vietnamese exporters to EU markets have never even heard of the bloc’s strict supply chain due diligence rules, even though they’re already in full force. Imagine showing up at a concert without knowing the dress code exists. Germany’s Supply Chain Due Diligence Act, live since 2023, and the EU’s Corporate Sustainability Due Diligence Directive (CSDDD), effective from 2024, aren’t suggestions. They’re legal requirements that reshape how global suppliers operate.

These rules demand transparency and accountability across human rights, labor practices, and environmental standards - all the way down the supply chain. For Vietnamese manufacturers, traders, and logistics providers exporting to the EU, failure to comply doesn’t just mean losing a single contract. It means potentially getting permanently ghosted from entire European value chains.

For Vietnamese businesses, the formula is straightforward: start by fully complying with domestic labor and environmental rules, align gradually with European standards, and work closely with EU partners on due diligence practices. Business associations and regulators need to expand training and early-warning systems fast.

Intel signalled its confidence vote in Vietnam: it’s pulling its chip assembly, packaging, and testing operations out of Costa Rica and parking them squarely in the country’s backyard. Intel’s Ho Chi Minh City plant, already the corporation’s largest assembly and testing facility globally (accounting for over 50% of total output), handles production of Intel’s cutting-edge 18A chips and employed more than 6,000 workers. Over two decades, it’s exported over 4 billion products and contributed over USD 100bn to Vietnam’s exports. The relocation signals Intel’s confidence that Vietnam offers superior manufacturing efficiency, a proven workforce, and supply-chain resilience that’s hard to beat. Plus, the company is actively recruiting more technicians through 2025 to prepare for the expansion.

Ho Chi Minh City’s government clearly sees this as a crown jewel investment and pledged full support, with Chairman Nguyen Van Duoc emphasizing the city’s commitment to backing Intel’s expansion alongside efforts to nurture talent in AI, foster innovation, and explore renewable energy investments. Intel responded by signing an MoU with Saigon Hi-tech Park to provide semiconductor training equipment, strengthening Vietnam’s talent pipeline in the sector. Kenneth Tse, General Manager of Intel Products Vietnam, framed the move as part of Intel’s broader global restructuring to enhance efficiency and competitiveness.

For Vietnam, this expansion represents far more than one company’s manufacturing shift. It’s validation that the country is becoming a trusted node in advanced semiconductor production, attracting not just assembly work but high-value, tech-intensive operations. Combined with efforts to train local engineers and invest in renewable energy infrastructure, Intel’s deeper presence could magnetize similar investments from other chip-industry giants.

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See you next week! 🥖