M&A activities in the banking sector are set to heat up in 2021, when the Covid-19 pandemic is fully contained and the majority of Vietnamese banks have completed their restructuring processes.
Many banks are on the brink of losing their market shares in case they lag behind in the digitalization process.
Fitch expects the economy to continue to recover, helped by well-controlled local coronavirus infection rates.
Fitch Solutions expected credit growth to weaken to 7% in 2020 from 13.7% in 2019, but the growth is predicted to pick up to 12% one year later.
On top of weak economic activity and low credit demand, the Covid-19 crisis macroprudential measures announced by the central bank will weigh heavily on banking sector profits for 2020.
Four major state-run banks account for nearly half of total deposits in the banking sector.
The central bank is willing to support liquidity for credit institutions, if needed, as they start providing financial support for the economy.
In 2020, the credit growth is expected to be in range of 13 – 13.5%, down from 13.7% last year.
Once completed, Aozora would become OCB Bank’s largest shareholder.
Under the prime minister’s plan on restructuring the stock market and the insurance market until 2020, with a vision towards 2025, all commercial banks are required to float shares before 2020.