VIETNAM BANKING INDUSTRY

The banking sector’s performance in 2018 has achieved remarkable results: credit growth reached 13.3% compared to the end of 2017. Medium and long-term credit showed signs of growth again in the first months of the year. Total mobilization capital from economic organizations and individuals increased by about 11.56% compared to the end of 2017. The mobilization and lending rates are relatively stable. In addition, the banking system still had to deal with many problems such as bad debt and risk management.

The year 2019 is forecasted to be a difficult year because there will be many fluctuations from the global as well as domestic market. The increasing captital issue will be a great pressure because the Circular 41 on capital adequacy ratio for banks will require more strictly under Basel 2 standards, which officially takes effect in early 2020. In addition, when the CPTPP Agreement officially takes effect, pressure from this Agreement to The banking sector will increase when foreign investors are more deeply involved and fierce competition with domestic banks, making it difficult for the banking system to do business.

Abbreviations
Report summary
1. Macroeconomic situation affecting the banking industry
1.1 International context
1.1.1 World economy overview
1.1.2 Current situation of world economy
1.2 Domestic context
1.2.1 Domestic economy overview
1.2.2 Current situation of domestic economy
1.3 Policies of ministries, departments and the Government
1.3.1 Objectives of macroeconomic policies in 2018
1.3.2 Policies of ministries, departments and the Government
1.3.3 Policies of the State Bank of Vietnam
1.3.4 Impact of Trade Agreement
2. Banking performance evaluation
2.1 Operations of world banking system
2.1.1 Outstanding policies of central banks over the  world and in the region
2.1.2 Exchange rate movement of some currencies over the world
2.1.3 Interbank interest rate movement of some countries
2.2 Some basic indicators of Vietnam banking industry
2.2.1 Mobilization and loans
2.2.2 Interest rate and exchange rate
2.2.3 Balance of Payment
2.2.4 Total liquidity
2.3 Operations of the State Bank of Vietnam
2.3.1 Interest rate
2.3.2 Exchange rate
2.3.3 OMO market
2.3.4 Required reserve
2.4 Operations of commercial bank system in Vietnam
2.4.1 Banking activity overview
2.4.2 Banking network development and payment system of banks
2.4.3 Performance evaluation of some typical banks
2.4.4 Outlook and forecast

Vietnam Joint Stock Commercial Bank for Industry and Trade (VietinBank)
Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank)
Bank for Investment and Development of Vietnam (BIDV)
TienPhongBank (TPBank)
Asia Commercial Bank (ACB)
Vietnam Maritime Joint – Stock Commercial Bank (MSB)
Vietnam International Commercial Joint Stock Bank (VIB)
The Vietnam Technological and Commercial Joint Stock Bank (Techcombank)

List of tables
Table 1: Basic commodity prices in the world, 2016 – 2018f
Table 2: Economic growth, 2014 – 3M/2018
Table 3: Fed Funds Rate, 2008 – 2017
Table 4: Interest rate of ECB, 2008 – 2017
Table 5: Interest rate of BOJ, 2008 – 2017
Table 6: Interest rate of PBOC, 2008 – 2017
Table 7: Exchange rates of some currencies in the world, 2016 – 2017
Table 8: Interbank interest rate in some countries, 2014 – 2017
Table 9: Some indicators of banking industry
Table 10:Credit to the economy, 2014 – 3/2018
Table 11: Structure of credit outstanding balance, 2014 – 3/2018 (%)
Table 12: Balance of International Payment, 2014 – 2017
Table 13: Some interest rate policies announced by the SBV, 2014 – 2017
Table 14: Open market operations and bonds auction of SBV, 2014 – 2017
Table 15: Required reserve ratio
Table 16: Some indicators of banking system, 2014 – 2017
Table 17: Network structure by type of bank, 2016

 

List of Figures:
Figure 1: Economic growth and commodity prices, 2010-2018e
Figure 2: Global economic growth, 2011-1/2018
Figure 3: Economic growth in ASEAN, 2013 – 2018F
Figure 4: GDP of ASEAN countries, 1970 – 2016
Figure 5: Global inflation rate and in some economic regions, 2012 – 10M/2016e
Figure 6: Inflation rate in some countries and in the region, 2014 – 10M/2016e
Figure 7: World commodity prices, 2013 – 2017
Figure 8: Share of Vietnam’s GDP by economic sector, 2014 – 3M/2018
Figure 9: Retail sales of consumer goods and services, 2014 – 3M/2018
Figure 10: Growth rate of retail sales of consumer goods and services, 2014 – 3M/2018
Figure 11: Overall consumer price index and commodity groups in the CPI basket, 2014 – 3M/2018
Figure 12: Price movement of some basic commodities, 2014 – 3M/2018
Figure 13: Some macroeconomic indicators of Vietnam, 2014 – 3M/2018
Figure 14: Some macroeconomic indicators, 2014 – 3M/2018
Figure 15: FDI and commodity import-export value, 2014 – 3M/2018
Figure 16: FDI and commodity import-export growth, 2014 – 3M/2018
Figure 17: Interest rate movement according to Fed Funds Rate, 2008 – 2017
Figure 18: Interest rate of ECB, 2008 – 2017
Figure 19: Interest rate of BOJ, 2008 – 2017
Figure 20: Interest rate of PBOC, 2008 – 2017
Figure 21: USD Index, 2014 – 2017
Figure 22: Interest rate movement of the interbank market in the world, 2014 – 2017
Figure 23: Total liquidity, capital mobilization and credit to the economy, 2014 – 3/2018
Figure 24: Loan to deposit ratio (LDR), 8/2016-3/2018
Figure 25: Loan to deposit ratio, 2/2018
Figure 26: Average interbank VND/USD exchange rate, 2016 – 3/2018
Figure 27: Average mobilizing and lending rates, 2012 – 2017e
Figure 28: Marginal interest income ratio, 2012 – 2017e
Figure 29: Balance of International Payment, 2011 – 2017e
Figure 30: Total liquidity, 2014 – 3/2018
Figure 31: Interest rate of SBV, 2010-3/2018
Figure 32: Exchange rate movement at SBV, 2016 – 3/2018
Figure 33: Forward interest rate of mortgages and bonds auction on OMO market, 2014 – 2017
Figure 34: Required reserve ratio classified by types of credit institution and currency
Figure 35: Credit growth in 3 months, 2013-2018e
Figure 36: Structure of Consumer Loans, 2017
Figure 37: Interbank interest rate, 2012 – 3/2018
Figure 38: Assets, ROAA and ROAE of commercial bank system, 2014 – 2017
Figure 39: Some indicators of the whole banking system by credit institutions, 2017
Figure 40: Bad debt ratio movement, 2012 – 2017e
Figure 41: Provision for credit losses, 2013 – 2017e
Figure 42: Minimum Capital Adequacy Ratio, 2012 – 2017e
Figure 43: Equity capital of 3 state-owned commercial banks according to Basel II, 2018 – 2020
Figure 44: Dealing room structure by region, 2016
Figure 45: Access ability to dealing rooms, 2016
Figure 46: Development of payment equipment, 2014 – Q1/2018
Figure 47: Development of payment system, 2014 – Q1/2018
Figure 48: Non-cash payments, 2014 – Q1/2018
Figure 49: Total assets, 2016 – 2017
Figure 50: Mobilization and loans, 2016 – 2017
Figure 51: Profits from forex trading, 2016 – 2017
Figure 52: Profit after tax, 2016 – 2017
Figure 53: Net interest income, 2016 – 2017
Figure 54: Profits from service business, 2016 – 2017
Figure 55: Profits from investment and stock trading activities, 2016 – 2017
Figure 56: Profit ratio, 2016 – 2017
Figure 57: Bad debt ratio, 2016 – 2017
Figure 58: Provision ratio for risks, 2016 – 2017
Figure 59: NIM coefficient, 2016 – 2017
Figure 60: Debt coefficient, 2016 – 2017
Figure 61: Self-financing ratio, 2016 – 2017