VN shines in ASEAN’s top 100 banks ranking
VN shines in ASEAN’s top 100 banks ranking
Viet Nam’s lenders have posted the second-highest growth in the Top 100 Association of Southeast Asian Nations (ASEAN) banks ranking list, released by the publication Nikkei Asian Review.
The greatest growth was recorded in Cambodia at 30.4 per cent, though it has only one lender, ACLEDA Bank, in the ranking list. Cambodia also accounts for only 0.1 per cent of the total assets in the ranking, down from 0.19 per cent the year before.
The assets of Vietnamese banks, 19 of which made it to the list, grew the second highest at 15.66 per cent, though they too contribute a relatively small share of the total assets in the ranking, 7.46 per cent, but up from the previous year’s 6.21 per cent. The ranking continues to be dominated by Malaysia, Singapore and Thailand, which jointly hold nearly three-quarters of the total assets.
Growth does not necessarily translate into profitability. With an aggregate return on assets (ROA) of 0.8 per cent and return on capital (ROC) of 12.19 per cent, Viet Nam is at the tail end of the ASEAN ranking for returns. As has been the case in the past, the champion in that category is Indonesia, which boasts an ROA and ROC of 2.7 per cent and 25.31 per cent, respectively.
Viet Nam’s banks stood out in terms of asset growth, with Viet Nam Prosperity Bank coming out on top with a 35.02 per cent increase, followed by local competitors Saigon Commercial Bank and Shinhan Bank Viet Nam, which saw 34.22 per cent and 33.32 per cent growth, respectively.
The country’s banks look to be poised to grow. However, despite robust growth and stability, banking penetration in Viet Nam remains among the lowest in the region. Only 30.86 per cent of the population aged 15 years and above had a bank account in 2014 in a country of 91 million people.
As Vietnamese banks expanded operations, they did not raise capital at a corresponding pace and have registered a meagre 4.54 per cent rise in Tier 1 capital, the lowest ranking among the countries measured.
Although the local banks are among the least profitable in the ranking, the situation is improving. Viet Nam showed a 6 per cent rise in pre-tax profits, which is a bigger increase than any other country except Singapore, where profits increased by 10.91 per cent.
Another notable growth story comes from the Philippines, which showed the largest asset growth in last year’s ranking. Local balance sheets grew by an impressive 13.59 per cent, the highest after Viet Nam and Cambodia, but more slowly than the year before when its banks recorded a 21.26 per cent expansion.
East West Banking Corp and Land Bank of the Philippines performed the best, with their assets growing by 31.7 per cent and 23.21 per cent, respectively. However, as in the case of Viet Nam, asset growth did not correspond with a major increase in the capital base, and Filipino banks’ aggregate Tier 1 capital growth was 6.53 per cent.
Launched in November 2013, Nikkei Asian Review is an English-language business journal brought out by Nikkei Inc, one of the largest media corporations in Japan, which specialises in publishing financial, business and industry news.
