Most commercial banks responding to a survey by the State Bank of Vietnam (SBV) said their business performance had seen considerable improvement in the third quarter, and they expect high profits this year.
Eighty-nine percent of banks think their pre-tax profit would have positive growth this year compared with 2016. The expected growth rate in the latest survey was 13.63 percent, a bit higher than the rate in June’s survey (13.22 percent).
Banks have a positive outlook about clients’ financial health levels: 79.1 percent of banks said the general risk is at ‘normal level’, while 13.2 percent said at ‘low level’ and only 7.7 percent said ‘high level’.
Banks were optimistic about the liquidity of the banking system with 85 percent of banks saying their liquidity is ‘good’ for both Vietnam dong and foreign currencies and 12 percent saying their liquidity is ‘stable’.
Nearly 90 percent of credit institutions said their ratio of bad debt on outstanding loans in the third quarter ‘did not increase’ or ‘slightly decreased’ compared with the second quarter.
The survey found that capital mobilization in the banking system is expected to see higher growth rate – 5.32 percent – in the fourth quarter.
Nguyen Quoc Hung, director of SBV’s Credit Department, told the local press recently that the 20 percent credit growth rate in 2017 was ‘attainable’.
The outstanding loans provided to manufacturing, mining and supporting industries have seen a growth rate of 18-19 percent compared with the same period last year.
The outstanding loans to agricultural production have increased by 10 percent. Banks have disbursed VND35 trillion under the program on funding hi-tech agriculture projects.
While the number of outstanding loans has been increasing rapidly, the interest rate is expected to decrease. Large and small joint-stock banks hope the average lending interest rate will decrease by 0.09 and 0.03 percentage points, respectively.
While state-owned banks have maintained low deposit interest rates since the end of 2016, some joint stock banks have to offer high deposit interest rates to attract capital.
The group of four state-owned banks, including Vietcombank, VietinBank, Agribank and BIDV, set interest rates at 4.3-4.4 percent for short-term deposit (less than one month), while the other banks offer interest rates of 5.4-5.5 percent.
Unlike previously, when banks set nearly the same interest rate, they now tend to set different rates. Large-scale banks with large networks and good brands offer interest rates much lower than smaller banks. Despite the low deposit interest rates, Vietcombank and BIDV still saw deposits increase by 10 percent in the first six months of the year.
Source: Kim Mai | VietnamNet