Hidden Risks Build at Vietnamese Banks on Debt Guarantees

Vietnamese lenders are providing more pledges to cover borrowers if they fall short paying back debt, prompting some rating firms to warn of hidden risks in one of the world’s fastest-growing economies.

Banks’ loan guarantees rose 19% to 52 trillion Vietnamese dong ($2 billion) in the first nine months of last year, according to data compiled by VIS Rating on 27 listed lenders. That outpaced a 13% rise in their total equity over the same period last year, adding to a similar mismatch in 2024.