VIETNAM BANKING INDUSTRY

Banking industry activity in the first 6 months of 2018 has achieved remarkable results such as: mobilized capital growth more positively than the same period in 2017, mobilized growth has also grown x.xx% compared to the end of 2017 (3.31% higher than the same period of 2017). Meanwhile, credit increased x.xx% compared to the end of 2017 and was lower than the same period of 2017 growth of 4.37%. Medium- and long-term credit has shown signs of recovery in first months of 2018.

There are still a number of limitations that the banking industry must continue to improve in the coming years: adjust credit structure towards more focus on industry and agriculture; balance capital to prevent risks; enhance the development of payment services, especially non-cash payment and modern payment services; exploiting the potential of the market through the allocation of a reasonable business network, focus on individual customers. The problem of bad debt in the banking industry has existed for many years and needs to be treated thoroughly.

It is forecast that the banking industry will continue to operate smoothly and without major fluctuations in 2018. VIRAC noticed positive signs in total asset , deposit and credit growth. Many positive signals toward the policy has been launched to help reduce bad debt in 2018. On the other hand, the banking industry will find it difficult to achieve high profitability due to the process of changing its business model, overcoming bad debt and challenges from macroeconomic conditions as well as dealing with structural and capital adequacy risks.

 Executive 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
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 figures
Figure 1: Economic growth and commodity prices, 2010-2018e
Figure 2: Global economic growth, 2011-6/2018
Figure 3: Economic growth in ASEAN, 2013 – 2018F
Figure 4: GDP of ASEAN countries, 2017
Figure 5: Global inflation rate and in some economic regions, 2012 – 2018
Figure 6: Inflation rate in some countries and in the region, 2014 – 2018
Figure 7: World commodity prices, 2013 – 2017
Figure 8: Economic growth rate, 2014 – 6M/2018
Figure 9: Share of Vietnam’s GDP by economic sector, 2014 – 6M/2018
Figure 10: Retail sales of consumer goods and services, 2014 – 6M/2018
Figure 11: Growth rate of retail sales of consumer goods and services, 2014 – 6M/2018
Figure 12: Overall consumer price index and commodity groups in the CPI basket, 2014 – 6M/2018
Figure 13: Price movement of some basic commodities, 2014 – 6M/2018
Figure 14: Some macroeconomic indicators, 2014 – 6M/2018
Figure 15: Some macroeconomic indicators of Vietnam, 2014 – 6M/2018
Figure 16: FDI and commodity import-export value, 2014 – 6M/2018
Figure 17: FDI and commodity import-export growth, 2014 – 6M/2018
Figure 18: Interest rate movement according to Fed Funds Rate, 2008 -6/2018
Figure 19: Interest rate of ECB, 2008 – 2017
Figure 20: Interest rate of BOJ, 2008 – 2017
Figure 21: Interest rate of PBOC, 2008 – 2017
Figure 22: USD Index, 2014 – 2017
Figure 23: Interest rate movement of the interbank market in the world, 2014 – 2017
Figure 24: Total liquidity, capital mobilization and credit to the economy, 2014 – 6/2018
Figure 25: Loan to deposit ratio (LDR), 8/2016-8/2018
Figure 26: Loan to deposit ratio, 6/2018
Figure 27: Average interbank VND/USD exchange rate, 2016 – 6/2018
Figure 28: Average mobilizing and lending rates, 2012 – 2017e
Figure 29: Marginal interest income ratio, 2012 – 2017e
Figure 30: Balance of International Payment, 2011 – 2017e
Figure 31: Total liquidity methods, 2014 – 6/2018
Figure 32: Structure of total liquidity methods , 2014 – 6/2018
Figure 33: Interest rate of SBV, 2010-6/2018
Figure 34: Exchange rate movement at SBV, 2016 – 6/2018
Figure 35: Forward interest rate of mortgages and bonds auction on OMO market, 2014 – 2017
Figure 36: Required reserve ratio classified by types of credit institution and currency
Figure 37: Credit growth in 6 months, 2013-2018e
Figure 38: Structure of Consumer Loans, 2017
Figure 39: Interbank interest rate, 2012 – 6/2018
Figure 40: Assets, ROAA and ROAE of commercial bank system, 2014 – 2017
Figure 41: Some indicators of the whole banking system by credit institutions, 2017
Figure 42: Bad debt ratio movement, 2012 – 2017e
Figure 43: Provision for credit losses, 2013 – 2017e
Figure 44: Minimum Capital Adequacy Ratio, 2012 – 2017e
Figure 45: Equity capital of 3 state-owned commercial banks according to Basel II, 2018 – 2020
Figure 46: Network structure by type of bank, 2016
Figure 47: Dealing room structure by region, 2016
Figure 48: Access ability to dealing rooms, 2016
Figure 49: Development of payment equipment, 2014 – Q2/2018
Figure 50: Development of payment system, 2014 – Q2/2018
Figure 51: Non-cash payments, 2014 – Q2/2018
Figure 52: Total assets, 2016 – 2017
Figure 53: Mobilization and loans, 2016 – 2017
Figure 54: Profits from forex trading, 2016 – 2017
Figure 55: Profit after tax, 2016 – 2017
Figure 56: Net interest income, 2016 – 2017
Figure 57: Profits from service business, 2016 – 2017
Figure 58: Profits from investment and stock trading activities, 2016 – 2017
Figure 59: Profit ratio, 2016 – 2017
Figure 60: Bad debt ratio, 2016 – 2017
Figure 61: Provision ratio for risks, 2016 – 2017
Figure 62: NIM coefficient, 2016 – 2017
Figure 63: Debt coefficient, 2016 – 2017
Figure 64: Self-financing ratio, 2016 – 2017

List of tables
Table 1: Basic commodity prices in the world, 2016 – 2018f
Table 2: Economic growth, 2014 – 6M/2018
Table 3: Fed Funds Rate, 2008 – 6/2018
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 – 6/2018
Table 11: Structure of credit outstanding balance, 2014 – 6/2018 (%)
Table 12: Balance of International Payment, 2014 – Q1/2018
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: Bancassurance in Viet Nam, 2017 – 2018