Calculation for risk-weighted assets will be stricter under Basel II standards, the capital adequacy ratio (CAR) of these banks will decline further once the new rules come into play. Fitch Solutions Macro Research, a unit of Fitch Group, stated in a newly-released outlook for Vietnamese banks that although the balance sheets of banks have notably improved over the past two years and have been helped by robust economic growth, the banking sector continues to be plagued by a wide range of legacy problems, including a weak regulatory framework, crony capitalism, and State - directed lending. Combining tighter lending criteria with a slowdown in economic growth, Fitch Solutions expects credit growth to slow to 13 per cent in 2019, down from an estimated 14 per cent in 2018, which is somewhat in line with the State Bank of Vietnam’s (SBV) lower credit growth target of 14 per cent in 2019, versus 17 per cent for 2018. Though Fitch … [Read more...] about Vietnam’s banking sector clean-up to weigh on credit growth
Banking sector
Banking sector urged to unfreeze resources to boost growth
The Government leader highly appreciated the sector’s contributions in ensuring macroeconomic stability, as well as its significant role in controlling inflation at 3.54% last year. The effective application of information technology and the development of new payment methods in banking activities have created convenience for customers and worked to reduce cash payments, thus saving costs for people, businesses and society as a whole, he stated. PM Phuc said that the restructuring of certain credit institutions still remains slow compared to the requested progress, urging the banking sector to conduct timely internal inspections and strictly handle any acts of violation. An overview of the conference. (Photo: VGP) He requested that the State Bank of Vietnam (SBV) continues regulating the monetary policy in a flexible and proactive fashion and effectively combine it with other policies, in addition to persisting with the goal of stabilising the macroeconomy, controlling inflation … [Read more...] about Banking sector urged to unfreeze resources to boost growth
PM orders breakthroughs in banking sector
Prime Minister Nguyen Xuan Phuc (middle) at the event (Photo: VNA) Hanoi (VNA) – Prime Minister Nguyen Xuan Phuc has ordered the banking sector to orientate itself in line with the Government’s spirit of breakthroughs. Attending the meeting in Hanoi on January 9 to launch tasks for the banking sector, PM Phuc ordered the State Bank of Vietnam (SBV) to continue its flexible monetary policy as well as work to stabilise the macro-economy, paving the way for other sectors to thrive. He underlined that this is a daunting task, requiring precise and rational management. Hailing the banking sector’s contributions to the nation’s macro-economic stability in 2018, PM Phuc said that the SBV’s monetary policy was carried out in harmony with other macro-policies, which was important to keep the average inflation at 3.54 percent and below the ceiling target. More specifically, in the context of complicated and unexpected developments of the global economy, the … [Read more...] about PM orders breakthroughs in banking sector
South Korea’s leading corporations tap into Vietnam’s finance – banking sector
The Hanoitimes - South Korea is the second largest source of foreign direct investment in Vietnam in the first 11 months of 2018. A growing number of South Korea’s leading corporations are making ways to tap into Vietnam’s finance and banking sector via capital contribution, share purchase, among other ways to compete with local credit institutions. Illustrative photo. On December 21, Hyundai Marine & Fire Insurance Company (HMFI), South Korea’s second-largest non-life insurer in terms of market share, agreed to acquire a 25% stake or 16.7 million shares of VietinBank Insurance (VBI). The deal is expected to raise the charter capital of the Vietnamese insurer to VND667 billion (US$28.5 million). At the signing ceremony, state-run Joint Stock Commercial Bank for Foreign Trade of Vietnam (VietinBank), a major shareholder of VBI, signed a strategic cooperation agreement with HMFI. VBI’s representative said the deal would … [Read more...] about South Korea’s leading corporations tap into Vietnam’s finance – banking sector
US$72 million project on strengthening banking sector’s capacity reviewed
Deputy Governor of SBV Nguyen Kim Anh speaks at the conference - Photo: nhandan The project has a total investment of US$71.83 million, including U$60 million in preferential loans from the International Development Association (IDA), US$0.83 million in non-refundable aid from the Government of Japan, and US$11 million from the Vietnamese state budget. It aims to assist the State Bank of Vietnam (SBV), the Credit Information Centre (CIC), and the Deposit Insurance of Vietnam (DIV) to improve the delivery of their main functions in accordance with the relevant international standards for the banking sector. According to Nguyen Kim Anh, Deputy Governor of SBV, this is the first project by the SBV to be implemented synchronously in key areas of backing sectors, such as monetary policy, foreign exchange management, and statistical forecasting, among others. The project is a close combination of strengthening institutional capacity and modernising information technology. The project was … [Read more...] about US$72 million project on strengthening banking sector’s capacity reviewed