Experts: Banking sector to enjoy another strong year
Experts discuss investment opportunities in Vietnamese banking stocks at Fiinpro Talk 6 in HCM City on April 19. (Photo: Stoxplus)
Speaking at Fiinpro Talk 6 on “Vietnamese banking stocks: investment opportunities and risks,” Nguyen Anh Tu, Deputy Director General of the State Bank of Vietnam’s Monetary Policy Department, said banking stocks did well in 2017 thanks to a favourable economic environment with a positive outlook for growth, well-anchored inflation, improved management of banks, better supervision by the Government, and a decrease in non-performing loans.
With economic growth expected to be even better this year, it would be another good year for the banking sector, he said.
Banks are more likely to make a profit on the back of a strong economy since it stimulates demand for credit, and Vietnam is a bank-based economy with 92% of capital in the economy provided by banks according to the National Financial Supervision Council, he said.
Retail lending is increasing due to demand from newly-established small businesses and SMEs, which have traditionally found it difficult to get corporate loans from banks, and increasing consumption by inpiduals due to positive expectations from the economy and rising affluence, he said.
According to a report from the Boston Consultant group, the size of the middle- and upper-income classes in the country will reach 33 million by 2020, creating huge demand for financial and insurance services.
According to data compiled by StoxPlus from 18 banks, who account for 60% of the country’s loans, retail loans are growing at double the rate of corporate loans, and increased their share to 37% of total loans.
“Consumer finance has been growing rapidly and playing a part in the parent banks’ story,” Nguyen Quang Thuan, CEO of financial and business information provider StoxPlus, said.
He cited the example of FE Credit, the consumer finance arm of Vietnam Prosperity Joint Stock Commercial Bank (VP Bank), which accounts for the majority of its parent company’s loans and helps VP Bank improve its earnings.
Similarly, HDBank owns HD Saison, a growing consumer finance company.
Besides, lenders like Techcombank, Sacombank, VP Bank, SHB, and Military Bank have posted significant commission incomes from their partnerships with life insurers last year, he added.
Speaking about banking stocks, he said: “[They] still have some room to play.”
He said banks are buying back their bad debts from the VAMC to collect them while their income from lending would remain at around 3%.
Fees earned through partnerships with third party financial services providers would drive the earnings growth of banks, especially those with large customer bases, he added.
Related News
Central bank starts huge credit package for social housing projects
14:42 | 04/04/2023 Finance
Nearly 400 complaints about insurance distribution through banks on Ministry of Finance hotline
14:47 | 04/04/2023 Finance
Central bank cuts policy interest rates to spur growth
17:43 | 02/04/2023 Finance
Need to effectively use tools to prevent exchange rate risks in import and export field
10:32 | 02/04/2023 Import-Export
Latest News
Corporate bonds worth 1.1 billion USD issued in March
13:55 | 06/04/2023 Finance
Tax revenue is estimated at VND 426,922 billion in the first quarter
09:56 | 06/04/2023 Finance
In Q1, State revenue estimated to rise by 1.3%
13:28 | 04/04/2023 Finance
Consider raising the level of penalties to ensure fairness and transparency in the stock market
13:27 | 04/04/2023 Finance
More News
Ensure policies to attract investment when implementing global minimum tax
10:33 | 02/04/2023 Finance
SBV asks to issue revised decree on foreign ownership cap at Vietnamese banks
20:30 | 01/04/2023 Finance
Solutions to attract FDI when implementing the global minimum CIT
11:38 | 01/04/2023 Finance
Effective implementation of tax incentives as driving force for growth in trade turnover between Vietnam and Cuba
13:43 | 31/03/2023 Finance
Being many "hot" issues at the general meeting of shareholders of banks
09:24 | 30/03/2023 Finance
Bringing the policies on reducing land rent and water surface rent into life
15:41 | 29/03/2023 Finance
The more delayed the investment disbursement is, the more accumulated the capital expenditure will be
10:22 | 29/03/2023 Finance
Ministry of Finance summarizes the 10-year implementation of the Resolution of the 8th meeting of the 11th Central Committee
10:20 | 29/03/2023 Finance
Deputy PM urges hastened procedures for cancelled IDA loans
14:25 | 28/03/2023 Finance
Your care
The system has not recorded your reading habits.
Please Login/Register so that the system can provide articles according to your reading needs.
Corporate bonds worth 1.1 billion USD issued in March
13:55 | 06/04/2023 Finance
Tax revenue is estimated at VND 426,922 billion in the first quarter
09:56 | 06/04/2023 Finance
Nearly 400 complaints about insurance distribution through banks on Ministry of Finance hotline
14:47 | 04/04/2023 Finance
Central bank starts huge credit package for social housing projects
14:42 | 04/04/2023 Finance
In Q1, State revenue estimated to rise by 1.3%
13:28 | 04/04/2023 Finance