Banking & Finance

Credit in the first quarter rose 5.04 per cent compared to the end of 2021 and 15.9 per cent year-on-year. The rise in credit led to an increase in the Interbank Offered Rate (IBOR). As of early April, the IBOR had increased over 2 per cent per annum for nine consecutive weeks, doubling since the end of 2021 and 5-6 times higher year-on-year.

Business results posted by banks for the first quarter increased compared to the previous quarter but fell short of expectations. According to the latest survey from the Monetary Forecasting and Statistics Department at the State Bank of Vietnam, 90 per cent of banks expect pre-tax profits to grow in 2022 compared to 2021, down 5 percentage points from the previous survey. Six per cent of banks have forecast a decline in profits this year.

The State Bank of Vietnam (SBV) is collecting comments on a draft decree for a controlled trial mechanism for fintech (financial technology) activities in the banking sector. The decree will create an incentive mechanism for businesses to provide or cooperate in providing banking and financial solutions under an innovative business model. Credit institutions and fintech companies will be able to test fintech solutions without a legal framework in a controlled environment, with mechanisms in place to prevent risks.

According to the General Department of Taxation, thanks to improvements in services and the recovery of business, total State budget revenue in the first quarter of 2022 reached nearly VND390 trillion ($17.18 billion), up 5.3 per cent over the same period of 2021. The budget will forego revenue of more than VND20 trillion ($881.9 million) due to reductions in environmental protection taxes on petrol and oil from April 1. The tax sector will therefore need to make every effort to complete its budget tasks in the second quarter.

On March 30, Deputy Prime Minister Le Minh Khai directed the implementation of measures to ensure the stock market operates stably, safely, smoothly, openly, transparently, and sustainably. It is also necessary to review mechanisms and policies and complete the legal framework relating to handling violations in the securities sector.

The Ministry of Finance has proposed extending four periods, from June to September, for the payment of special consumption taxes on domestically-manufactured or assembled cars, with such support costing up to VND11.4 trillion ($497.23 million) in total.