Banking & Finance

As a popular destination for FDI, Vietnam also welcomes a large inflow of foreign currencies. The country’s banking system has maintained low interest rates, which is in line with ongoing trends, as central banks around the world are applying loosened monetary policy.

The Military Commercial Joint Stock Bank (MB) expects to post revenue of $5 billion and profit of $2 billion by 2026, despite the pandemic. Thanks to the promotion of digital transformation and technological infrastructure, its business activities have been stabilized and recorded positive results.

Involved in self-trading, some securities companies have a large market share but revenue is quite small and profits are almost non-existent. Since some accept lower brokerage fees and interest rates, investors stand to benefit the most.

Transactions for and the price of gold have virtually “frozen” in Vietnam since the beginning of July. The recent upturn in the USD exchange rate has put downward pressure on the precious metal, though it is still supported by accommodative monetary policy from the central bank and the need for hedging during the pandemic.

Deposits by economic organizations into banks increased sharply in the first half of the year. According to experts, the new outbreak of Covid-19 in April resulted in many enterprises temporarily suspending operations, with money previously set aside for production being transferred to banks to earn interest. Figures from Vietnam Securities Depository (VSD), meanwhile, show that, as of the end of June, domestic investors had more than 3.39 million securities accounts, equal to 3.5 per cent of the population.

Banking activities during the first half of the year have been acknowledged by the National Assembly Economic Committee, in particular the management of exchange rates, interest rates, and inflation. Appropriate solutions will be needed in the second half to handle bad debts, simplify procedures, support business recovery, and seize opportunities to develop the digital economy, e-commerce, and non-cash payment services.