VietinBank will be the first bank in the country’s group of four largest State-owned commercial banks (Big4) to cut the number of its transaction offices. According to a plan released at VietinBank’s annual general meeting of shareholders (AGM) recently, the bank is expected to cut hundreds of transaction points to streamline the system in 2025.
Bad debts of commercial banks in Vietnam as of December 31, 2024 hit more than 733.9 trillion VND, an increase of 3.4% compared to the end of 2023, according to the State Bank of Vietnam.
After declining in the first two months of this year, credit of the banking industry in March increased by 0.26% compared to the end of 2023 to about 13.6 quadrillion VND, the State Bank of Vietnam (SBV) reported.
The Government has introduced measures to stimulate credit growth to spur the economy, but experts are concerned loans could flow into risky industries that are the most capital thirsty with high absorption capacity.
Five banks in Vietnam recorded a pre-tax profit of more than 10 trillion VND (422 million USD) in the first six months of this year, financial statements of the banks showed.
Pre-tax profit growth of the whole banking industry will decelerate in 2023 and there will be a significant difference in the growth between small- and large-sized banks, experts forecast.
Experts said that the national economy is facing challenges in various fields, hence Vietnam needs to soon develop macro-economic scenarios to prevent things from getting worse.
Non-cash payment transactions witnessed a significant surge in the first two months of this year, indicating a notable shift in customers’ behaviour towards modern financial services.
Global turmoil caused 2022 to be a challenging year with unprecedented difficulties facing the banking industry. But it has responded relatively well, contributing to controlling inflation and stabilizing the macro-economy.
The banking industry will continue to face difficulties in 2023 in the context of the real estate market downtrend and the less positive import and export outlook, analysts forecast.
Weak banks that are restructuring will be the target of merger and acquisition (M&A) deals in the near future as the Government is strongly promoting the restructuring of the country’s finance and banking industry.
Though banks gained profits of trillions of Vietnamese dong in Q3 2022, credit quality has remained a concern of the banking industry, especially when Circular No. 14/2021/TT-NHNN on loan rescheduling for COVID-19 affected borrowers expired at the end of June this year.
Mergers and acquisitions (M&A) in the banking industry are expected to remain high for the rest of the year as the industry continues the digital transformation process, according to experts.
The banking industry may have a hard time reaching its 2022 profit growth targets, but share valuations have dropped significantly to attractive prices.
