Future looks bright for local banks
Future looks bright for local banks
Business performance of commercial banks is forecast to continue its upward trend in 2018 after making significant improvements last year, according to a State Bank of Viet Nam (SBV) survey.
According to the business sentiment survey, which covered domestic and foreign commercial banks in Viet Nam, released on Thursday, 71.8 per cent of the respondents expected better results in Q1 2018 compared with Q4 2017 and 88.6 per cent hoped their business performance this entire year will further improve against last year, of which 29.2 per cent anticipated “significant improvement”.
Up to 92.6 per cent of the correspondents forecast their pre-tax profit in 2018 would rise compared with last year, helping the average growth rate of the entire banking system reach 19.33 per cent, much higher than the 13.4 per cent forecast in a survey conducted at the same time last year.
A total of 78.1 per cent of the correspondents also expected customer demands for banking services, especially lending, this year will increase in comparision with last year. The rate for Q1 2018 alone is 59 per cent.
According to the survey that was conducted in Q4 2017, 56.3 per cent of the correspondents said their performance currently is “good”, higher than the rates of 52.2 per cent in the Q3 2017 survey and 54 per cent in the same period of 2016.
A total of 85.5 per cent of the correspondents also said their performance in 2017 was better than 2016, of which 31.3 per cent saw a “significant improvement”.
Compared with the previous survey conducted in Q3 2017, banks were also more optimistic about credit growth and capital mobilisation this year.
Banks forecast that the banking system’s credit growth would reach 4.74 per cent in Q1 2018 and 17.65 per cent this entire year.
The respondents also anticipated capital mobilisation of the entire banking system this year would reach 16.66 per cent, of which the rise in Q1 would be 4.46 per cent.
Banks also said that the liquidity of the banking system in both Vietnamese dong and foreign currencies is currently ‘good’ and the positive status will be remained in this entire year.
They also forecast that the non-performing loan (NPL) ratio at all banks will reduce, making the NPL ratio of the entire banking system average at 2.43 per cent.
With optimism about the growth prospects for 2018, banks also anticipated the industry’s labour market would see positive changes in the coming months.
According to the survey, 52.1 per cent of the respondents would increase their recruitment in Q1 2018, while 68.7 per cent expected more recruitment this entire year.
Despite conducting more recruitment in Q4 2017, 25.3 per cent of the correspondents said they are still short of employees.
