HÀ NỘI — Several of Việt Nam’s top banks, including Vietcombank and VPBank, officially registered to implement the new capital adequacy regulations set out in Circular 14/2025/TT-NHNN, which took effect on September 15. This important step aims to strengthen the stability and transparency of the country’s banking sector.

Vietcombank, the first to adopt Basel II standards ahead of schedule, has now registered to apply both the Standardised Approach and the Internal Ratings-Based Approach. While Circular 41/2016 laid the initial foundation for Basel II, Circular 14/2025 advances the sector systematically towards Basel III, enhancing risk management and strengthening Vietcombank’s position regionally and internationally.

The updated regulations aim to better assess customer risks and standardise data, supporting more effective credit policies and risk management. Yet, they also bring challenges such as higher capital requirements and increased investment costs, demanding stronger credit portfolio management to meet capital adequacy ratio standards.

VPBank has also taken significant steps by registering for the IRB method, a sophisticated risk measurement tool requiring banks to develop their own models for calculating risk parameters.

The bank has been preparing since 2021, aiming to position itself among the top three banks in Việt Nam and within the top 100 banks in Asia.

In contrast to larger banks, KienlongBank’s decision to adopt the new regulations immediately upon their implementation has been viewed as a bold move.

The lender has consistently maintained a CAR exceeding the minimum by 3 to 4 per cent, laying a solid foundation for Basel III readiness.

KienlongBank is also in the process of increasing its charter capital through a 60 per cent stock dividend and plans to list on the Ho Chi Minh Stock Exchange (HoSE).

Chairman of KienlongBank Trần Ngọc Minh said automation of capital calculation processes allows them to shorten data compilation times, eliminate manual errors and enhance their ability to monitor CAR proactively.

More importantly, it serves as a strategic decision-making tool for management, helping optimise their risk-weighted asset portfolio and ensure the bank remains in a safe state, he added.

Circular 14 allows banks to register for early implementation when they meet the requirements set by the State Bank of Vietnam (SBV).

The new regulations elevate capital standards from 8 per cent to 10.5 per cent over a four-year period and introduce minimum requirements for Core Equity Tier 1 (CET1) and Tier 1 capital.

The proactive approach taken by these banks indicates a significant shift in risk management philosophy.

Instead of viewing regulatory requirements as burdens, they see them as opportunities to strengthen financial foundations, enhance credibility and gain competitive advantages in a rapidly evolving financial landscape. — BIZHUB/VNS