Banks have reported satisfactory business results for 2020 and are projecting ambitious plans for 2021.
Increasing chartered capital is the most important task for the four state-owned commercial banks. If their CARs are lower than Basel II standards, they will have to restrict lending.
Some credit institutions (CIs) that have not yet completed their restructuring roadmap will have to speed up the process to meet the State Bank of Vietnam (SBV)’s deadline this year.
Overdue debts, which are increasing rapidly during Covid-19, will adversely affect business results and capital growth capability of many commercial banks in Vietnam.
Many banks have adjusted business plans and set lower business targets as businesses, or bank clients, have been hit hard by Covid-19.
With Circular 22, which took effect on January 1, the State Bank of Vietnam (SBV) has laid a new block to restrict capital flow to the property sector.
2019 has been a good year for the banking sector. Most commercial banks performed well with profit results exceeding the targets set earlier in the year.
Fitch analysts were upbeat about continued strong economic growth in Vietnam, which makes near-term stress unlikely and underpins their stable outlook for the banking sector.
The time to apply standards in accordance with Basel II is nearing and commercial banks are rushing to raise chartered capital.
Commercial banks are issuing international bonds because they need foreign currencies to satisfy dollar capital demand.