VIETNAM BANKING INDUSTRY

Banking operations in the first months of 2019 achieved many remarkable results. Credit has gradually been controlled more strictly, as of March 25, 2019, credit increased by 2.28% compared to the end of 2018, rising 1.9% over the same period of 2018. The situation of deposit interest rates as well as lending interest rates was relatively stable. Thanks to Resolution 42, the debt collection rate has increased greatly and the bad debt ratio in the economy has been reduced.

As of February 2019, the total assets decreased by 0.69% compared to the end of 2018. The CAR index went on a downward trend from 13.22% (2014) to 12.14% (2018) and 11.8% ( February, 2019). Besides, according to the data of the State Bank, by the end of February 2019, the total equity and charter capital of the whole system had slight fluctuations compared to the end of 2018, relatively decreased by 0.69% and increased by 0.31%. The liquidity of the banking system remained relatively stable.

2019 is forecast to be a difficult year because of many fluctuations from the world as well as internal market of Vietnam’s banking industry. The intrinsic nature of the banking system still has many unsolved problems in the short term. Besides, there are also abnormal fluctuations from the global financial market under the impact of the US-China trade war and FED’s monetary tightening schedule. In addition, the pressure from the CTPPP agreement for banks is also growing when foreign investors participate more deeply and intensely, compete fiercely with domestic banks.

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

Asia Commercial Joint Stock Bank (ACB)
Ho Chi Minh Development Joint Stock Commercial Bank (HDB)
JSC Bank For Investment And Development Of Vietnam (BID)
LienViet Post Joint Stock Commercial Bank (LPB)
Military Commercial Joint Stock Bank (MBB)
Saigon Thuong Tin Commercial Joint Stock Bank (STB)
Vietnam Technological and Commercial Joint Stock Bank (TCB)
Vietnam Joint Stock Commercial Bank For Industry And Trade (CTG)
Vietnam Prosperity Joint Stock Commercial Bank (VPB)
Joint Stock Commercial Bank for Foreign Trade of Vietnam (VCB)

List of Figures
Figure 1: Economic growth and commodity prices, 2010-2020e
Figure 2: Global economic growth, 2011-2019
Figure 3: Economic growth in ASEAN, 2013 – 2019F
Figure 4: GDP of ASEAN countries, 2018
Figure 5: Global inflation rate and in some economic regions, 2012 – T3/2019
Figure 6: Inflation rate in some countries and in the region, 2014 – 2019e
Figure 7: Economic growth rate, 2014 – 2018
Figure 8: Share of Vietnam’s GDP by economic sector, 2014 – Q1/2019
Figure 9: Retail sales of consumer goods and services, 2014 – Q1/2019
Figure 10: Overall consumer price index and commodity groups in the CPI basket, Q1/2016 – Q1/2019
Figure 11: Price movement of some basic commodities, Q1/2015 – Q1/2019
Figure 12: Some macroeconomic indicators, Q1/2016 – Q1/2019
Figure 13: Some macroeconomic indicators of Vietnam, 2014 – Q1/2019
Figure 14: FDI and commodity import-export value, 2014 – Q1/2019
Figure 15: FDI and commodity import-export growth, Q1/2016 – Q1/2019
Figure 16: Interest rate movement according to Fed Funds Rate, 2008 – Q1/2019
Figure 17: Interest rate of ECB, 2008 – Q1/2019
Figure 18: Interest rate of BOJ, 2008 – Q1/2019
Figure 19: Interest rate of PBOC, 2008 – Q1/2019
Figure 20: USD Index, 1/2015-3/2019
Figure 21: Interest rate movement of the interbank market in the world, 2014 – 3/2019
Figure 22: Total liquidity, capital mobilization and credit to the economy, 2014 – 2/2019e
Figure 23: Loan to deposit ratio (LDR), 8/2016-2/2019
Figure 24: Credit granting ratio / mobilized capital source, 11/2018
Figure 25: Credit balance structure, 2/2019
Figure 26: Average interbank VND/USD exchange rate, 2016 – 3/2019
Figure 27: Average mobilizing and lending rates, 2012 – 2018e
Figure 28: Marginal interest income ratio, 2012 – 2018e
Figure 29: Balance of International Payment, 2011 – 2018e
Figure 30: Total liquidity, 2014 – 2/2019
Figure 31: Structure of total liquidity methods, 2014 – 2/2019
Figure 32: Interest rate of SBV,1/2010-3/2019
Figure 33: Exchange rate movement at SBV, 2016 – 3/2019
Figure 34: Forward interest rate of mortgages and bonds auction on OMO market, 2014 – 2018
Figure 35: Required reserve ratio classified by types of credit institution and currency
Figure 36: Credit growth, Q1/2016-Q1/2019
Figure 37: Consumer lending structure, 2015 – 2018
Figure 38: Interbank interest rate, 2012 – T3/2019
Figure 39: Property system, ROAA and ROAE of commercial banking system, 2014 – 9/2018
Figure 40: Some indicators of the whole banking system by credit institutions, 9/2018
Figure 41: Comparison of ROA criteria of credit institutions of some countries, 2014 – 2018e
Figure 42: Comparison of ROE criteria of credit institutions of some countries, 2014 – 2018e
Figure 43: Indicators to ensure liquidity according to credit institutions, 2/2019
Figure 44: Bad debt ratio movement, 2012 – 2018e
Figure 45: Provision for credit losses, 2013 – 2018e
Figure 46: Minimum Capital Adequacy Ratio, 2012 – 2018e
Figure 47: Network structure by type of bank, 2016
Figure 48: Dealing room structure by region, 2016
Figure 49: Access ability to dealing rooms, 2016
Figure 50: Development of payment equipment, Q1/2014 – Q1/2019
Figure 51: Development of payment system, Q1/2014 – Q1/2019
Figure 52: Cashless payments, Q1/2015 – Q1/2019
Figure 53: Total assets, 2017 – 2018
Figure 54: Debt ratio, 2017 – 2018
Figure 55: Self-financing rate, 2017 – 2018
Figure 56: Deposits and loans to customers, 2017 – 2018
Figure 57: Bad debt ratio, 2017 – 2018
Figure 58: Net interest income, 2017 – 2018
Figure 59: Net revenue from service activities, 2017 – 2018
Figure 60: Profit from foreign exchange trading, 2017 – 2018
Figure 61: Profit from investment securities trading,
2017 – 2018
Figure 62: Risk reserve ratio, 2017 – 2018
Figure 63: Profit after tax, 2017 – 2018
Figure 64: Profit margin, 2017 – 2018
Figure 65: NIM, 2017 – 2018

List of tables
Table 1: Basic commodity prices in the world, 2017 – 2019f
Table 2: Economic growth, Q1/2018 – Q1/2019
Table 3: Fed Funds Rate, 2008 – Q1/2019
Table 4: Interest rate of ECB, 2008 – Q1/2019
Table 5: Interest rate of BOJ, 2008 – Q1/2019
Table 6: Interest rate of PBOC, 2008 – Q1/2019
Table 7: Exchange rates of some currencies in the world, 31/3/2018 – 31/3/2019
Table 8: Interbank interest rate in some countries, 2014 – 3/2019
Table 9: Some indicators of banking industry
2014 – 2/2019e
Table 10: Credit to the economy, 2014 – 7/2018
Table 11: International payment balance, 2014 – 6M / 2018
Table 12: Some interest rate policies announced by the SBV, 2014 – 3/2019
Table 13: Open market operations and bonds auction of SBV, 2014 – 2018
Table 14: Required reserve ratio
Table 15: Some indicators of banking system, 2014 – 2/2019
Table 16: Bancassurance in Viet Nam, 2017 – 2018