July 07, 2016
Improved business conditions and stronger credit demand have allowed Vietnamese banks to grow 20.4 percent over 2015. This puts them on track for their targeted credit growth of 18-20 percent in 2016, a range that will propel them above 2015’s growth rate of 17.3 percent. This is especially noteworthy because 2015 exhibited their strongest growth since 2007.
The State Bank of Vietnam published a survey that cited banks as seeing better annual results year over year, complemented by improved second quarter liquidity. This marks their recovery from a financial crisis that pushed bad debts to levels as high as 17.2 percent of total credit.
Among the strong performers were Vietcombank, Vietnam’s largest lender by market value, which saw a 62 percent profit increase. VietinBank followed closely with profit growth of 54 percent.
BIDV, Vietnam’s largest bank in terms of asset value, expects a 20 percent growth in pre-tax profits.
In other forecasts, deposits in dong currency are expected to grow, while foreign currency deposits are expected to slow. The central bank has been cutting rates on dollar deposits in order to mitigate impede dollar hoarding. However, it did resume short-term foreign currency loans in order to stimulate economic growth.