On the morning of May 25, the Joint Stock Commercial Bank for Investment and Development of Vietnam – BIDV (chaired by the Institute of Training and Research) and the Asian Development Bank (ADB) co-organized a seminar to announce the “Market Vietnam’s finance 2021 and prospects 2022”.
Assessing the prospect of Vietnam’s financial market in 2022, Dr. Can Van Luc – BIDV’s chief economist said that BIDV’s research shows that in the context of the recovery of the global economy, increased capital demand, and a positive increase in the asset market will be the driving force for the banking industry to develop. positive hope.
For Vietnam’s banking industry, the analysis team predicts that credit will grow positively in 2022; especially, in the 2nd and 4th quarters, it is expected at 14-15% (including credit packages from the Recovery Program). Increased credit comes from both the supply side and the demand side.
On the supply side, credit institutions with increased financial capacity and positively controlled credit quality will be granted a higher credit growth limit than in 2021.
On the demand side, the economy is recovering, the demand for capital for production, business and consumption increases. However, the tourism and aviation industries may take longer to return to normal, the tourism industry is forecasted to recover about 60% in 2022 compared to 2019 (due to the recovery of international tourism). slower than domestic travel) and aviation will recover to pre-epidemic levels by the end of 2023.
On the other hand, Dr. Can Van Luc believes that the problem of bad debt, especially potential bad debt, will still be of concern in 2022. Although the bad debt on the balance sheet of credit institutions will decrease slightly (to 1.5% in 2021 from 1.7% at 1.7%). in 2020, but gross bad debt (including off-balance sheet bad debt, unresolved bad debt sold to VAMC and potential bad debt from restructuring due to the Covid-19 pandemic) increased to 6.3 % at the end of 2021 (from 5.1% in 2020).
According to the forecast of the research team led by Dr. Can Van Luc ranks first, bad debt on the balance sheet in 2022 will increase to 2% and gross bad debt will still be high (about 6%), if Circular 14 of the State Bank (will expire at the end of June 2022) not extended. However, the economy recovered, businesses returned to production, the financial capacity of credit institutions continued to be strengthened, the provisioning rate was high, the extension of Resolution 42/2017 /QH14 until the end of 2023 and the possibility of extending Circular 14 of the State Bank is quite high (to facilitate credit institutions to have more resources and customers can access capital in the condition of recovery) will help billions This bad debt ratio is still under control of management agencies and credit institutions.
With the expectation that the economy will recover, credit will increase strongly again; at the same time, credit institutions continue to develop services, especially digital banking, bancassurance, priority customer service (private banking), and reduce costs; The analysis team forecasts that the banking industry’s business results have positive growth potential in 2022.
”Most banks have set their profit growth target at around 25-30% compared to 2021. We forecast an increase of 20-25%.”’. Dr. Can Van Luc said.
However, the industry’s profit growth in 2022 still faces some difficulties and challenges, including: (i) Circular No. 16/2021/TT-NHNN dated November 10, 2021, from January 15, 2021 By 2022, credit institutions are not allowed to buy corporate bonds for the purpose of restructuring debts or increasing capital of the issuing enterprise, reducing profitability from this operation, but also better controlling risks. ; (ii) Circular 14 of the State Bank, if not extended, will have a certain impact on profitability when credit institutions have to increase provisioning for DPRRs for non-restructured debts; (iii) some customers in a number of fields (such as tourism, accommodation – meals, exports to Russia, Ukraine, etc.) are still facing difficulties due to slow recovery or being directly affected by the war in Russia. – Ukraine, leading to a decrease in credit quality; (iv) Deposit interest rate may increase but lending interest rate is difficult to increase, leading to NIM (net interest margin difference) may decrease as above;…vv
Regarding capital increase, the research team assesses that raising capital through issuing shares will continue to be focused on by credit institutions because in 2022, the State Bank of Vietnam will instruct credit institutions not to pay cash dividends to continue reducing interest rates. lending rates support businesses and people, and continue to increase capital.
The increase in capital is also an existing need of credit institutions to meet Basel 2 standards and correspond to a relatively high increase in risky assets (credit) (14-15%). However, the capital increase will be less than in 2021 because the stock market is correcting, bears more risks and the possibility of a decline is high as outlined below.
As for the CASA ratio, the research team assesses that demand deposits will still increase well, but the proportion of CASA in total deposits may not be as high as 2021 because term deposits will also increase, specifically: (i) High credit growth in 2022 requires credit institutions to take measures (including increasing interest rates) to attract deposits; (ii) Credit institutions may gradually reduce payment and remittance fees as they did in 2021, while competition to attract CASA increases; (iii) Some credit institutions are expanding open banking activities (Open Banking), establishing ecosystems, creating incentives for people to transfer money to banks to perform payment activities, but this requires time.
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