Strategic insights for financial leaders, presented by VIET Transformation Advisors
Introduction: Reform That Touches Every Corner of the Market
On May 19, 2025, Vietnam introduced Decree 69/2025/ND-CP, a bold and far-reaching regulation set to reshape its banking sector. At first glance, the changes may appear technical: a higher cap on foreign investment in troubled banks, new operational flexibilities for acquirers, and temporary regulatory concessions. But the real story is broader – and far more human. This is about risk, resilience, and the rebuilding of trust in Vietnam’s financial system.
The decree doesn’t only affect institutional investors or top-level bank executives. It also sends powerful signals to every borrower, every business with a loan, and every entrepreneur relying on credit to grow. When the rules of banking change, so do the rules of borrowing.
What This Means for Borrowers and Businesses
For credit customers – both individuals and companies – the implications of Decree 69 are already beginning to surface. As acquiring banks absorb struggling institutions and their legacy loan books, they inherit not just numbers on a balance sheet, but real-world relationships with borrowers. Some of these borrowers may be distressed themselves. Others may simply find themselves suddenly dealing with a new lender.
In this environment, loan agreements are likely to come under review. Borrowers may be asked to renegotiate terms, provide updated documentation, or meet new collateral requirements. Those with restructured loans might face tougher scrutiny, especially if their files now sit in the “special assets” department of amerged bank.
On the flip side, the influx of capital and expertise – particularly from foreign investors – also means borrowers may benefit from more modern credit scoring, fairer restructuring processes, and faster decision-making. For those in good standing, this could result in smoother refinancing or more responsive banking services. For those in difficulty, the new landscape could offer structured workouts that prioritize business continuity over legal escalation.
Ultimately, borrowers should prepare for change – but not necessarily for the worse. Transparent communication, documentation readiness, and proactive dialogue with their bank will be key in navigating this transition successfully.
Navigating New Ownership and Operational Dynamics
Decree 69 offers a powerful incentive for banks willing to take on the responsibility of acquiring weak institutions. By raising the foreign ownership cap to nearly half the equity, it encourages greater international investment and expertise in the Vietnamese banking sector. Alongside this, the decree provides acquiring banks with preferential terms, such as reduced reserve requirements and access to refinancing through the State Bank of Vietnam. These provisions are designed to ease short-term financial burdens and enable more flexible credit growth during the transition phase.
Nonetheless, banks must address a critical trade-off: the absorption of large portfolios of non-performing loans (NPLs) inherited from the acquired institutions. This burden transforms the credit risk landscape, requiring institutions to reassess their underwriting standards and credit monitoring mechanisms. Traditional risk models must be retooled to reflect the new reality – one where stress testing is no longer an annual check, but an ongoing, rigorous exercise. Capital planning must be robust enough to absorb shocks from legacy exposures, ensuring the institution’s resilience even under adverse scenarios.
The Reality of Integration: More Than Numbers
Integrating troubled banks into healthier entities is rarely straightforward. Beyond the headlines about ownership and capital, banks face operational hurdles that can strain resources and patience. Data systems often operate in silos, collection policies may vary widely, and legal enforcement procedures can become bottlenecks if not harmonized swiftly. These challenges make the management of legacy NPLs a complex endeavor that demands more than internal capacity.
A practical solution lies in the establishment or expansion of Special Asset Management Units (SAMUs). These dedicated teams act as focused hubs for managing distressed assets, guiding restructuring negotiations, orchestrating collateral recoveries, and handling legal complexities with sector-specific expertise. For SAMUs to succeed, however, they must be empowered with clear mandates, staffed by experienced professionals, and supported by pragmatic restructuring frameworks.
The Crucial Role of Restructuring Advisory
While internal capabilities are vital, the scope and intricacy of the tasks ahead mean that external restructuring advisors become indispensable partners. Their role extends beyond traditional consulting; they offer independent, unbiased assessments that enhance trust among regulators, shareholders, and foreign investors alike. Their experience in designing recovery plans and managing stakeholder expectations ensures that restructuring efforts stay on track.
Moreover, these advisors provide governance frameworks for monitoring progress, enforcing accountability, and aligning milestones with strategic objectives. In a context where execution risks carry high reputational and financial stakes, the support from seasoned advisors can be the difference between a stalled process and a successful turnaround. They also contribute significantly to capacity building within banks, equipping staff with negotiation skills and regulatory knowledge essential under the new regime.
VIET Transformation Advisors: Decades of Trusted Partnership
With more than two decades of experience navigating Southeast Asia’s most challenging credit crises, VIET Transformation Advisors brings unparalleled expertise to this evolving landscape. Our track record encompasses strategic due diligence on distressed portfolios, operational setup of SAMUs, and (Include a photo of senior VIET Transformation Advisors Advisors consultants in a high-level meeting or on-site at a bank.)
Conclusion: Embrace the Opportunity with Confidence
Decree 69 opens a door to growth and resilience for Vietnam’s banking sector. But walking through that door requires preparation, discipline, and trusted partnerships. Success lies in understanding that the new foreign ownership limits come hand-in-hand with an obligation to manage inherited risks carefully and to act decisively on restructuring.
Banks that lead with clear vision, strong operational alignment, and expert guidance will turn this regulatory shift into a lasting competitive advantage. The future belongs to those who not only adapt but transform.
To explore how VIET Transformation Advisors can support your journey, connect with us and gain the edge to navigate Decree 69 with strength and clarity.