Banks pursue sustainable growth

The current development and future strategies of many local commercial banks are creating confidence about a sustainable growth of the banking sector.

Recent assessments by international organisations have shown a bright picture about the performance of the banking sector, of which, leading credit organisations such as Vietinbank, Techcombank, Vietcombank and BIDV have resumed their momentum and shown good health.

The Asian Banker recently commented that the performance of Vietnam’s banking sector has continuously improved, thanks to the government’s reform efforts and the positive movement of the economy. The assessment is based on an analysis of operation and ranking of 16 Vietnamese banks, including state-owned banks and joint stock commercial ones.

banks pursue sustainable growth

The current development and future strategies of many local commercial banks are creating confidence about a sustainable growth of the banking sector (Photo: Techcombank)

According to the Asian Banker, Vietnam’s banking system has shown a positive performance, reflected in the country’s highest asset growth rate in the Asia Pacific region. In terms of profits, domestic banks have reached an impressive net profit growth of 37.4%.

Quite a number of recorded indicators have shown a positive development trend. For example, deposit/credit growth rate has boomed, reaching 1.5 times, compared to the same period, while credit growth has maintained at 18%. Though interest income still dominated, in the revenue structure of some banks, service fees increased significantly, to approximately 20%. Also thanks to good mobilisation and a positive improvement in the operation of businesses, partners of banks, the liquidity of the system has improved very well.

The Asian Banker appreciated bad debt settlement efforts, with the sub-prime debt ratio at just 2.5% at the end of 2016, the lowest level in recent years. The report also praised the increased risk management awareness of banks, which most clearly reflected in the compliance with new regulations of the State Bank, as well as Basel II standards.

The Asian Banker has ranked 500 banks in the region with total assets of US$224 billion, and a net profit of US$1.6 billion. Notably, in terms of Strength Rank (the strongest banks following the asset balance sheet), the top 3 leading banks are Vietcombank (No. 48 out of 500 regional banks), Techcombank (No.101) and Vietinbank (No.124).

As such, Techcombank was the only joint stock commercial bank among the Top 3 banks with the highest profitability, following the assessment of The Asian Banker. This achievement was thanks to the fact that the bank had implemented good risk management measures, while having a good asset quality.

In September, the prestigious credit rating agency S&P also rated Vietcombank and Techcombank as equally as Vietnam’s national rating, or “national credit rating ceiling.” This is the highest rating that a Vietnamese bank can achieve (until S&P upgrades its credit rating for Vietnam).

According to S&P’s assessment, Techcombank has “a balanced choice between profit increase and risk management.” In 2017, Techcombank completed its bad debt purchase from the Vietnam Asset Management Company (VAMC) and started applying risk management framework under the Basel II international standard.

Assessing the move on bad debt purchase of banks, Pham The Anh, economic expert at the National University, told Dan Tri newspaper there were two noticeable points. First, the financial strength of banks allowed them to have abundant resources to acquire bad debt. Besides, the asset quality of loans had improved a lot (which may come from changes in the operation of businesses, in the bank’s accompanying policy and positive movement of the economy).

Expert Can Van Luc believed banks that really do business professionally and gain high credit scores from world prestigious rating institutions would maintain sustainable development and see good business results, taking advantage of opportunities when the economy integrates deeply into the region and the world.

Source: VNA

Related News

Banks increase non-interest revenue

Banks increase non-interest revenue

VCN - Slow credit demand and fierce competition have forced banks to seek ways to increase non-interest revenue, especially when there is a lot of support from the digital transformation of the entire banking system.
A “picture” of bank profits in the first nine months of 2024

A “picture” of bank profits in the first nine months of 2024

VCN - Pre-tax profits for banks during the first nine months of 2024 remained positive, exceeding 200 trillion VND, solidifying the sector's position as a market leader.
Continue to handle cross-ownership in banks

Continue to handle cross-ownership in banks

VCN - The situation of excess share ownership, cross-ownership between credit institutions (CIs), CIs and enterprises, although has decreased significantly compared to previous periods, is still complicated and requires continued inspection and control.
Stipulate implementation of centralized bilateral payments of the State Treasury at banks

Stipulate implementation of centralized bilateral payments of the State Treasury at banks

VCN - The Ministry of Finance (MOF) gathers feedback on the draft Circular regulating the management and use of accounts of the State Treasury opened at the State Bank of Vietnam (SBV) and commercial banks.

Latest News

Vietnam

Vietnam's stock market to develop strongly and sustainably

VCN - This was emphasized by Minister of Finance Nguyen Van Thang at the Conference to review the work of 2024 and deploy the work of 2025 of the State Securities Commission (SSC) held on the afternoon of December 18.
Tax sector achieves revenue target of about VND1.7 million billion

Tax sector achieves revenue target of about VND1.7 million billion

VCN – Motivated by the revenue collection by the end of December 2024, the General Department of Taxation has accomplished the revenue collection.
General inventory of public assets raises efficiency of use and management of country

General inventory of public assets raises efficiency of use and management of country's resources

VCN – The implementation of the General Inventory Project by the Ministry of Finance, ministries, central and local agencies has ensured progress according to Project 213 and the plan issued by the Ministry of Finance. This is the information provided by a representative of the Department of Public Asset Management (Ministry of Finance) at the press conference on the implementation of the General Inventory Project of public assets organized by the Ministry of Finance on the afternoon of December 18.
Publicizes progress of public investment disbursement for important national projects

Publicizes progress of public investment disbursement for important national projects

VCN – Important national projects, inter-regional transport projects, riverbank and coastal erosion treatment projects all have disbursement rates lower than the estimated average disbursement rate of the whole country, the Ministry of Finance said.

More News

Six SOEs to be transferred back to industry ministry

Six SOEs to be transferred back to industry ministry

Six State–owned enterprises (SOEs) with a total State stake of 800 trillion VND (31.5 billion USD) will be transferred back to the Ministry of Industry and Trade (MoIT) after six years under the management of the Commission for the Management of State Capital at Enterprises (CMSC).
PM urges stronger measures to manage interest rates

PM urges stronger measures to manage interest rates

Prime Minister Pham Minh Chinh has asked the State Bank of Vietnam (SBV) to proactively, flexibly, promptly, and effectively manage the monetary policy in combination with the expansionary fiscal policy and others.
Six SOEs to be transferred back to industry ministry

Six SOEs to be transferred back to industry ministry

Six State–owned enterprises (SOEs) with a total State stake of 800 trillion VND (31.5 billion USD) will be transferred back to the Ministry of Industry and Trade (MoIT) after six years under the management of the Commission for the Management of State Capital at Enterprises (CMSC).
Vietnamese products: Conquering foreign customers in supermarket systems

Vietnamese products: Conquering foreign customers in supermarket systems

VCN - According to the Ministry of Industry and Trade, the proportion of Vietnamese goods in distribution channels currently reaches more than 80% in supermarkets and 60% or more in traditional retail channels. For many retailers, Vietnamese goods have become a growth driver as they not only do business successfully in the domestic market but also export.
Answering many questions from businesses at dialogue conference on tax and customs policies

Answering many questions from businesses at dialogue conference on tax and customs policies

VCN - Many opinions and recommendations related to tax and customs issues were raised by the business community at the dialogue on tax and customs policies and administrative procedures in 2024, organized by the Ministry of Finance.Representatives of the Ministry of Finance, the General Department of Taxation, and the General Department of Customs provided specific responses, and affirmed that they will continue to research and advise on the assessment, review, and amendment and supplementation of appropriate regulations.
Enterprises face difficulties in tax refunds due to partners closing

Enterprises face difficulties in tax refunds due to partners closing

VCN - On December 13, at a dialogue conference on tax and customs policies and administrative procedures organized by the Ministry of Finance in coordination with the Vietnam Chamber of Commerce and Industry (VCCI), enterprises proposed solutions to many problems related to tax policies such as VAT refunds, tax declaration procedures, electronic invoices, etc.
Strengthen the management and use of electronic invoices for e-commerce

Strengthen the management and use of electronic invoices for e-commerce

VCN - Prime Minister Pham Minh Chinh requested ministries, branches and localities to strengthen the management and use of electronic invoices and improve the efficiency of tax collection for e-commerce.
Ministry of Finance proposes comprehensive amendments to the Personal Income Tax Law

Ministry of Finance proposes comprehensive amendments to the Personal Income Tax Law

VCN - The Ministry of Finance has just completed the proposal to draft the Personal Income Tax Law (PIT) and officially solicited public comments. By amending and supplementing nearly 90% of the total number of articles of the current PIT Law, the Ministry of Finance has submitted to the Government for permission to propose the draft PIT Law to replace the PIT policy system. The project is expected to be approved by the National Assembly in May 2026.
Expansionary fiscal policy halts decline, boosts aggregate demand

Expansionary fiscal policy halts decline, boosts aggregate demand

VCN - Customs News interviews Ms. Nguyen Thanh Nga, Deputy Director of the Institute for Financial Strategy and Policy (Ministry of Finance).
Read More

Your care

Latest Most read
Vietnam

Vietnam's stock market to develop strongly and sustainably

VCN - This was emphasized by Minister of Finance Nguyen Van Thang at the Conference to review the work of 2024 and deploy the work of 2025 of the State Securities Commission (SSC) held on the afternoon of December 18.
Tax sector achieves revenue target of about VND1.7 million billion

Tax sector achieves revenue target of about VND1.7 million billion

VCN - With the determination to accomplish the revenue collection to create resources for economic development under the Prime Minister's direction, the entire Tax sector has made efforts to perform the revenue collection in the last days of 2024.
General inventory of public assets raises efficiency of use and management of country

General inventory of public assets raises efficiency of use and management of country's resources

VCN – The implementation of the General Inventory Project by the Ministry of Finance, ministries, central and local agencies has ensured progress according to Project 213 and the plan issued by the Ministry of Finance. This is the information provided by
Publicizes progress of public investment disbursement for important national projects

Publicizes progress of public investment disbursement for important national projects

VCN - The Ministry of Finance has issued Document No. 13213/BTC-DT to publicize the progress of public investment disbursement of key national projects.
Six SOEs to be transferred back to industry ministry

Six SOEs to be transferred back to industry ministry

Six State–owned enterprises (SOEs) with a total State stake of 800 trillion VND (31.5 billion USD) will be transferred back to the Ministry of Industry and Trade (MoIT) after six years under the management of the Commission for the Management of State Capital at Enterprises (CMSC).
Mobile Version