Chủ đề: banks

Deposit rates rose an average of 3 basis points in the first quarter of 2022 compared to the fourth quarter of 2021. Average lending rates fell 8 basis points. VDSC Securities estimates that average growth of total net interest income in the banking sector was 21 per cent in the first quarter, with total operating income up 36 per cent and pre-tax profit 70 per cent.

Agreeing that the operation of the banking system is not perfect and that inadequacies in the economy hinder the release of all resources for growth, analysts have proposed six solutions to improve efficiency in the management, exploitation, use, and promotion of resources for socio-economic development.

Business results posted by banks for the first quarter increased compared to the previous quarter but fell short of expectations. According to the latest survey from the Monetary Forecasting and Statistics Department at the State Bank of Vietnam, 90 per cent of banks expect pre-tax profits to grow in 2022 compared to 2021, down 5 percentage points from the previous survey. Six per cent of banks have forecast a decline in profits this year.

Vietnam’s fintech market has made great strides forward in recent years, especially in the banking and finance sector, which is posting among the highest growth in Southeast Asia. Fintech businesses are therefore in need of a legal corridor to avoid unnecessary risks and tighten their relationships with banks.

With an interest rate support package of VND40 trillion ($1.75 billion) for businesses approved by the National Assembly (NA), the amount of credit with preferential interest rates flowing into the market may total VND2 quadrillion ($87.72 billion). As this sum is significant, the banking sector must adopt suitable policies to avoid any negative consequences.

Concerned about liquidity risks, many banks have raised their savings interest rates. The Bao Viet Securities Company (BVSC) forecasts that it will be difficult to reduce rates this year and they are likely to rise slightly again, especially in the second half.

The banking sector should continue to support and remove difficulties facing individuals and businesses, promote the recovery and development of production and business, and further cut lending interest rates, especially for priority sectors, and direct capital flows into production and business, Deputy Prime Minister Le Minh Khai told a conference on the tasks in 2022 for the banking sector on December 29.

The legal framework allowing credit institutions to use electronic technology for credit activities still exhibits shortcomings. Regulations allowing credit to be extended via electronic methods remain general in nature, which can create difficulties and lead to legal disputes between banks and customers.

Aside from risks such as a sharp decline in deposits and a sharp increase in bad debts, together with greater competition from fintech companies, banks also face risks relating to real estate corporate bonds. The State Bank of Vietnam has therefore issued regulations restricting banks from pouring money into the corporate bond market.

Sixteen commercial banks have agreed to cut their lending interest rates from July 15, 2021, to the end of the year, with customers saving an estimated VND20.61 trillion ($906.11 million). In which, four State-owned commercial banks committed to a dedicated support package of VND4 trillion ($175.81 million) to reduce interest rates and service fees.

Vietnam’s non-cash payment ecosystem has witnessed the first cooperative deal between the National Payment Corporation of Vietnam (NAPAS), under the State Bank of Vietnam (SBV), and 13 Vietnamese banks to introduce domestic credit cards. This confirms the increasing popularity of non-cash payments in the country.

Rice enterprises in the Mekong Delta are facing many difficulties from the impact of the pandemic. The banking sector will therefore introduce solutions such as expanding and increasing credit limits for rice purchasing in order to remove the difficulties and avoid disruptions to the rice supply chain.

The decision to extend social distancing measures in economic centers such as Hanoi, Ho Chi Minh City, and southern provinces has put pressure on cash flow in businesses. Experts have said that even though loans have been suspended, when they become due once again there will be more problems surrounding bad debts, especially when they are covered as restructured debts.

In Resolution No. 88/NQ-CP from the online government meeting with localities on the socio-economic situation in July and the first seven months of 2021, the government requested that banks pay attention to providing small loans to customers affected by the pandemic.

The amount of credit available for transport infrastructure is becoming increasingly limited. Now is the right time to issue corporate bonds and carry out public-private partnership (PPP) traffic projects, Mr. Tran Van The, Vice Chairman of the Deoca Group, said at VnEconomy’s online “Development of the corporate bond market: Balancing the advantages of issuers and investors” conference. Many regulations still place restrictions on businesses, however, and a channel to attract capital via bonds is yet to be approved.

Covid-19 has resulted in banks accumulating more bad debts. Since June 10, 2020, outstanding loans at 14 credit institutions have totaled about VND600 trillion ($26.25 billion). Under current regulations (Circular No. 03), this debt balance is not restructured. Banks have identified 12 issues in the implementation of Circular No. 03 and suggested they be amended immediately or a new circular issued.

The Delta variant of Covid-19 has dealt a severe blow to the recovery efforts of Vietnam’s aviation sector. Airlines are struggling to maintain liquidity and are borrowing additional working capital to overcome the difficulties.

Since April 29, credit institutions, including 78 banks, 22 finance companies, finance leasing companies, and microcredit companies, and 294 credit funds have implemented three rounds of interest rate cuts to support businesses.

Deposits by economic organizations into banks increased sharply in the first half of the year. According to experts, the new outbreak of Covid-19 in April resulted in many enterprises temporarily suspending operations, with money previously set aside for production being transferred to banks to earn interest. Figures from Vietnam Securities Depository (VSD), meanwhile, show that, as of the end of June, domestic investors had more than 3.39 million securities accounts, equal to 3.5 per cent of the population.