Sector Credit Review: Vietnam Commercial Banks

1H2024 review and 2025 outlook FiinRatings is pleased to announce the Sector Credit Review Report on Vietnam Commercial Banks, providing review of 1H2024 and outlook for 2025. Below are the key highlights from our report:

FiinRatings is pleased to announce the Sector Credit Review Report on Vietnam Commercial Banks, providing review of 1H2024 and outlook for 2025. Below are the key highlights from our report: 

• Macroeconomic Trends and Outlook: Economic recovery has proven more subdued than expected in 1H2024; While we believe that gradual recovery is expected to continue in 2024-2025, we remain only cautiously optimistic on the prospect of Vietnam’s economy. 

• Banking sector Takeaways: 

#1: Per our expectations of pro-growth policies in 2024, we believe that the government’s credit growth target of 14% is likely to be met, though we remain skeptical on the quality of credit growth. Corporate segment will continue to drive credit growth, as many corporate sectors will benefit from the pro-growth policies and investments from the government. Retail segment is unlikely to display clear recovery signal by YE2024. 

#2: The reported problematic loans appeared to stabilize in the last 04 quarters, yet we affirm our view that the key asset quality pressure currently comes from restructured loans under Circular No.02/2023/TT-NHNN, which is likely to be extended. While majority of commercial banks maintained relatively similar level of real estate exposure in 1H2024 in comparison to 2023, we have observed that some banks have been focusing on providing guarantees for real estate project companies’ bond issuance. This may expose commercial banks to certain risks, especially in the beginning of project life. 

#3: In 1H2024, capital buffer at majority of commercial banks has risen overall, thanks to their extensive efforts to increase their charter capital. Regarding profitability, in our view, industry NIM by the end of 2024 will likely maintain or trend downward. Interest and fee receivable quality also continues to deteriorate, with smaller banks bearing the brunt of the decline; ROE and ROA displays clear signs of differentiation among commercial banks. 

• Banking sector Anchor: Our assessment to maintain the sector anchor at [a-] in our previous review still stands in this review, though it is worth noting that commercials are likely to continue facing pressure from both asset quality and profitability in the upcoming. 

Please click [HERE] for the detailed report in English. 

For support or inquiry, please contact FiinRatings at:   

Tel: (84-24) 3562 6962     

Email: support.fiinratings@fiingroup.vn    

For media inquiries:  

(Ms.) Binh Thuy Le – Marketing Manager  

Điện thoại: 0369771109 

Email: binh.le@fiingroup.vn 

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