Banking & Finance

According to FiinRatings, factors affecting the profits of securities companies include liquidity risk, proprietary trading, interest rates, and exchange rates.

A recent report from the Agribank Securities Company (Agriseco) noted that the banking sector will face challenges maintaining profit growth in 2022 and 2023 at levels recorded in 2020 and 2021. Growth has declined amid insufficient space for credit growth, while Net Interest Margins (NIM) face pressure from rising deposit rates as lending rates prove difficult to increase.

Under a recently-issued government Resolution, the State Bank of Vietnam needs to implement prudent and firm monetary policy, ensuring the flexibility to control inflation and stabilize the macroeconomy. In particular, it should be ready to sell foreign currencies when necessary to intervene and stabilize the market.

Tax revenue has shown signs of deceleration in recent months. To exceed estimates by 15.5 per cent, the tax sector will drastically increase revenue from e-commerce activities and build big data from e-invoices to readily track fraud.

A negative deposit-credit gap and the State Bank of Vietnam’s withdrawal of money have tightened liquidity in the banking system. Interbank VND rates have skyrocketed. The overnight interest rate on October 4 was up to 7.74 per cent per annum, or 2.58 percentage points higher than in the middle of last week. Deposit interest rates are expected to continue to increase in the near future.

A survey conducted recently by Vietnam Holdings found that retail investors have a gloomy attitude towards securities, with just 7 per cent of respondents intending to invest in the stock market. The figure in August 2021 was 47 per cent. The average amount being invested is also down, by $2,000 to under the $9,900 average posted over the past ten months and 30 per cent below the figure at the beginning of the year.