VPBank has officially registered with the State Bank of Vietnam (SBV) to adopt the Internal Ratings-Based (IRB) Approach under Circular 14/2025/TT-NHNN (Circular 14)

On September 15, 2025 – Vietnam Prosperity Joint Stock Commercial Bank (VPBank) has officially registered with the State Bank of Vietnam (SBV) to adopt the Internal Ratings-Based (IRB) Approach under Circular 14/2025/TT-NHNN, becoming the first few banks to apply the IRB approach as the Circular takes effect today.

Driven by a vision to rank among the top 3 banks in Vietnam and the top 100 banks in Asia, VPBank continues to strengthen its risk management capabilities in alignment with international standards and leading global financial institutions practices. In 2019, VPBank was one of the first banks approved by the SBV for the early adoption of Circular 41/2016/TT-NHNN, complying with Basel II standards. The official registration to adopt the IRB approach marks the next milestone in VPBank’s strategic roadmap, underscoring VPBank’s consistency and long-term vision, and reflecting comprehensive preparation since early 2021.

Circular 14/2025/TT-NHNN enables banks to register for early implementation once they are ready and meet the SBV requirements, replacing the Circular 41/2016/TT-NHNN. Circular 14 introduces standards aligned with Basel III, marking a significant milestone in Vietnam’s regulatory framework and aiming for comprehensive adoption of international best practices. The new regulation strengthens capital standard by raising the minimum capital adequacy ratio from 8% to 10.5% over a four-year roadmap, and introducing minimum requirements for Common Equity Tier 1 (CET1) and Tier 1 capital. Notably, the Circular permits banks, for the first time, to adopt the Internal Ratings-Based (IRB) approach, allowing banks to internally estimate risk parameters for more accurate, institution-specific risk measurement.

The IRB approach requires banks to develop and use their own internal models to estimate key parameters such as Probability of Default (PD), Loss Given Default (LGD), and Exposure at Default (EAD), requiring robust data infrastructure, advanced IT systems, and highly skilled human resources to meet regulatory requirements. Globally, the IRB approach is widely adopted by leading international banks for risk measurement and integration into business operations.

VPBank has successfully established comprehensive governance and oversight frameworks, including policies, procedures, and a credit data repository system with at least 5–7 years of historical data across both corporates and retail portfolio to support risk parameter estimation. The bank has also upgraded its IT infrastructure to a modern cloud-based platform, meeting the complex and stringent requirements for implementing the credit rating system under the Circular 14. The adoption of the IRB approach not only ensures regulatory compliance but also supports the bank’s long-term strategic goals in risk management, enabling proactive, timely risk monitoring and control, minimizing expected losses, and enhancing resilience to macroeconomic volatility.

About VPBank

As one of Vietnam’s pioneering joint stock commercial banks, VPBank has maintained sustainable growth for over 30 years. Today, VPBank ranks among the leading commercial banks in terms of total assets, operational efficiency, and profitability, with a strong presence in Retail and SME segments. The bank is also a pioneer in digital transformation, delivering fast and high-quality financial products and services to customers.

As of June 30, 2025, VPBank’s consolidated total assets exceeded VND 1.1 quadrillion, placing it among the largest joint stock commercial banks in Vietnam. The bank also ranks among the top in capital strength, with total equity surpassing VND 152 trillion. VPBank continues to reinforce its balance sheet, laying a solid foundation for long-term sustainable growth.

Since 2015, VPBank has been a pioneer in implementing Basel II standards, investing comprehensively in technology, building a highly skilled workforce, and conducting regular training programs to stay aligned with global best practices in risk management. In 2019, VPBank was approved by SBV for early compliance with Circular 41, becoming one of the first institutions in Vietnam to adopt Basel II. With a pioneering and innovative spirit, VPBank has affirmed its leadership in risk management, earning prestigious international awards from The Asian Banker, Asia Risk, Celent, and Energy Risk, and ranking among the top 5 Vietnamese companies with the highest ASEAN Corporate Governance Scorecard (ACGS) in 2024.

Learn more at: https://www.vpbank.com.vn