State-owned banks lag behind in lending growth

State-owned lenders have been achieving slower credit growth than the industry average for the last five years while private banks are on the fast lane.

A man withdraws cash from an ATM in Ho Chi Minh City. Photo by Shutterstock/Saigoneer.

Of the ‘Big Four’ state-owned banks, BIDV, Agribank and VietinBank recorded growth rates that were less than the industry average of 14.6 percent a year in 2016-20 period, according to a note by Rong Viet Securities.

Vietcombank was the only one to buck the trend with growth of 16.2 percent.

"Most of the increase in the credit market share in recent years went to private lenders, while the state-owned lenders’ share dwindled," the report said.

The latter lost a combined 1.42 percentage point of the market share, it said.

Part of the reason has been state-owned lenders’ inability to increase capital and to dilute state ownership, it said.

Meanwhile, private lenders like Techcombank, Military Bank and VPBank posted average growth of over 20 percent in the period, while Saigon Hanoi Bank achieve 18.8 percent and ACB, 17.4 percent.

Some like TPBank and VIB even achieved growth rates of over 30 percent and 25 percent though their share of credit remained small at 1.4 percent and 1.9 percent.

Rong Viet Securities analysts said since credit would continue to play an important role in helping the economy achieve GDP growth of 6-8 percent, lending growth is expected to remain in double digits.

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