Banking & Finance

Mr. Michael Kokalari, Chief Economist at VinaCapital, said the valuations of Vietnamese bank stocks are currently quite low compared to expected earnings growth of at least 30 per cent in 2022 and 20 per cent in 2023. In the long term, the banking sector will continue to be attractive due to high margins, well-controlled asset quality, low mortgage and retail penetration, and rising earnings.

To ensure Vietnam’s corporate bond market develops stably and sustainably, the Ministry of Finance and the Ministry of Construction will work together to strengthen supervision over issuance activities and limit real estate enterprises issuing bonds with high interest rates. The Ministry of Construction also suggested supplementing regulations on the financial safety ratio of real estate enterprises after granting construction and investment permits for real estate projects.

A report from the State Bank of Vietnam (SBV) presented to the National Assembly reveals that as of the end of August, the bad debt ratio on the banking system’s balance sheets remained at a safe 1.9 per cent. The ratio of bad debts, unresolved debts sold to the Vietnam Asset Management Company (VAMC), and potential bad debts at credit institutions was 4.99 per cent, down sharply from the 6.3 per cent posted at the end of 2021.

The State Bank of Vietnam (SBV) believes that inflationary pressure is tending to increase. The 2022 figure is expected to exceed 4 per cent, posing challenges in control efforts next year. Cutting lending interest rates will also face difficulties, due to deposit rates and the USD/VND exchange rate both tending to increase.

Data from FiinRatings shows that outstanding corporate bonds as of the end of September totaled more than VND1.3 quadrillion ($53 billion), or more than 13 per cent of 2021 GDP. Non-banking enterprises have VND908.8 trillion ($37 billion) and real estate enterprises VND455 trillion ($18 billion). This accounts for only 4 per cent of total credit in the banking system.

The National Payment Corporation of Vietnam (Napas) and South Korea’s BC Card Company (BC Card) signed a cooperation agreement on October 17 in South Korea regarding non-cash payments in Vietnam and South Korea. The agreement will contribute to promoting the development of digital payments in trade as well as trade promotion and tourism between the two countries.