Monday, 24 Jun 2019

Vietnam banks in race to join Asia top 100

Updated at Wednesday, 15 Aug 2018, 15:24
The Hanoitimes - Assuming Vietnam`s top three state-run banks can maintain their respective growth rate of 5 - 10% in the next eight years, their total assets would be over VND1,500 trillion (US$63.95 billion), equivalent to those currently in Asia`s top 100 banks.
Under the development strategy of Vietnam's banking sector recently approved by the prime minister, the country is expected to have at least 2 - 3 commercial banks in Asia's top 100 largest banks in terms of assets by the end of 2025.
Illustrative photo.
Illustrative photo.
Last year, 15 Vietnamese banks were named in the Asian Bankers' AB500 ranking and survey of Asia Pacific's strongest banks by balance sheet. Among Vietnamese lenders, Bank for Investment and Development of Vietnam (BIDV) took the highest spot at 157th, followed by Joint Stock Commercial Bank for Foreign Trade of Vietnam (VietinBank) at the 163rd and Vietnam Joint Stock Commercial Bank for Industry and Trade (Vietcombank) at the 188th. 

Those three state-run banks keep a respectable distance from its local peers, as Saigon Thuong Tin Commercial Bank (Sacombank) hold the fourth place among Vietnamese banks in the list at the 341st. 

According to financial data provider CafeF, banks with high ranks in the list have their respective assets worth around the VND1,000 trillion (US$42.65 billion) mark. Specifically, BIDV's assets reached VND1,260 trillion (US$53.72 billion) in 2017, while those of Vietinbank and Vietcombank were VND1,110 trillion (US$46.91 billion) and VND977 trillion (US$41.67 billion), respectively. 

Notably, all three banks reported a growth rate in their assets of around 10% annually. Assuming they can maintain the growth rate of 5 - 10% annually in the next eight years, their total asset sizes would be over VND1,500 trillion (US$63.95 billion), equivalent to those of current Asia's top 100 banks. 

Meanwhile, total assets of Sacombank - Vietnam's largest privately-run bank stood at VND400 trillion (US$17.05 billion), a third to leading state-owned banks' assets. 

This would place only BIDV, VietinBank and Vietcombank as possible candidates to achieve the target set under the development strategy. 

According to plan, the government will keep its minimum shareholding in state-owned commercial banks (excluding Vietnam Bank for Agriculture and Rural Development or Agribank) at at least 65% in the 2018 - 2020 period and then gradually reduce to 51% in the 2021 - 2025 period. 

The state currently holds a 95.28% stake in BIDV, 77.11% in  Vietcombank and 64.46% in VietinBank. All the three lenders are listed on the Ho Chi Minh City Stock Exchange.

Those three banks will proceed with the search of credible strategic investors, with the aim of listing in foreign stock exchanges in the future. 
Nguyen Tung
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