Banking & Finance

The use of monetary policy to support the economy is now nearing its limit. Analysts therefore believe that banks will have to find a balance between profit growth and asset quality control this year in the context of lower net interest margins (NIM). Bank profits are forecast to grow by 19 per cent in 2022, down from 25 per cent in 2021.

A gradual tightening of monetary policy globally will not disrupt Vietnam’s economic recovery. Deposit interest rates may increase slightly in 2022 but the stock market is still the preferred channel of investors.

The VN-Index repeatedly set new records during 2021, with market capitalization rising sharply, liquidity continuing to explode, and the number of investors increasing significantly. The State Securities Commission will make efforts during 2022 to bring new regulations and policies in the Securities Law and guiding documents into practice to support businesses and protect investor interests.

From July 15 to November 30, 16 large commercial banks agreed to reduce lending interest rates, with a total reduction of more than VND18 trillion ($791.3 million), of which four joint stock commercial banks led State-owned banks. The State Bank of Vietnam will direct credit institutions to cut lending interest rates further in 2022 to support the economy.

The past two years was a tough time for Vietnam’s economy but its stock market was able to maintain growth momentum. It is expected to continue to grow in 2022 thanks to cooperation from all parties involved.

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.