Vietnam banks expect higher profitability in 2019: C.bank

Eighty eight percent of Vietnam’s credit institutions expected higher profitability in 2019 compared to the previous year, of which 20 – 29% predicted “much improvement,” according to the State Bank of Vietnam (SBV). 

Most banks reported a better business environment and higher business results in the January – March period against the same period last year, informed the SBV in its latest survey on business trends among credit institutions in the first quarter.



In the first three months of 2019, 70.4% of credit institutions saw improvements in their respective business performance, of which 14.3% stated “much improvement.”



Following the result, 80.6% of respondents expected “improvement” in profitability in the second quarter, higher than the rate of 79.3% recorded in the survey last December. 



In addition to the positive sentiment, 55.1% of credit institutions have recruited more workers in the first quarter; 25.51% were short of workers and 61.23% planned to employ more in the upcoming quarter. 



In 2019, credit institutions expected “financial capability”, “service quality” and “demand for financial products” would be improved significantly. 



Meanwhile, there has been a sharp improvement in customers’ credibility, as the overall risk of customers in the first quarter has been on a declining trend compared to previous quarters. 



This resulted in 67.01% of credit institutions adjusting their risks assessment on customers at “stable”, 14.43% expecting “decline” and 18.56% expressed concern on “higher risk”. The corresponding rates of the previous quarter were 63.53%, 15.29% and 21.18%, respectively. 



Additionally, credit institutions forecast the bad debt ratio at a lower rate in 2019 against 2018, while the liquidity of the banking system continues to improve, and remains in a good state for both foreign and domestic currencies, which is expected to be extended in the upcoming quarter and for the whole year. 



Capital mobilization and outstanding loans of the banking system are expected to grow 13.74% and 14.51% in 2019, respectively, which are higher than the actual rates recorded in 2018.