Banking industry to have high growth

As per the survey, 89 per cent of credit institutions estimated their growth this year to be positive in comparison with last year.
A total of 70.65 per cent of credit institutions continued to be optimistic about the trend of increasing demand for financial and banking services in 2017, especially demand for loans in the fourth quarter of 2017.
Capital mobilisation and lending are expected to accelerate in the last quarter of the year, of which capital mobilisation will grow 5.32 per cent, as against 3.74 per cent in Q4 last year, and credit growth will rise 6.07 per cent, as against 5.91 per cent in Q4 of 2016.

The Bank for Investment and Development of Vietnam (BIDV) plans to fetch a pre-tax profit of VND7.75 trillion (US$341.4 million) in 2017.

As for interest rates in Q4, State-owned banks expected the rate to decline by 0.06-0.15 percentage points for both deposits and loans. Joint stock commercial banks expected a higher reduction of 0.45 percentage points for loans and 0.57 percentage points for deposits.
State-owned banks and joint stock commercial banks also expected the lending rate in the whole year to reduce by 0.09 and 0.03 percentage points, respectively, as against December last year.
Economist Le Xuan Nghia said Vietnam’s banking industry in 2017 has witnessed a spectacular recovery, following a period of significant efforts towards dealing with bad debt, especially the risk provision. The net interest on total assets of the banking sector used to fall to 0.4 per cent but has now reached some 0.8 per cent, while some banks have touched more than one per cent. The net interest on equity fell to 5.6 per cent during certain times but has now risen to eight per cent, even more than the 10 per cent at some banks.
Compared with the most difficult period, commercial banks’ profitability has nearly doubled. This is the most important sign proving that commercial banks’ financial potential has recovered quite impressively, he said.
Some banks have increased their equity through domestic capital, and most of these banks have invested heavily in technology to develop new services, such as internet banking, mobile banking and automatic payment, in this difficult scenario. The aforementioned achievements are remarkable, reflecting a new trend of the banking sector in terms of risk management, management and service development towards Bank 3.0, he added.