TPBank is one of nine joint stock commercial banks which plan to list on the stock market in 2018. (Photo: baophapluat.vn) Hanoi (VNA) - The listing of nine commercial banks in 2018 isexpected to boost the banking sector, as well as the entire securities market.
The nine commercial banks that hadplanned their listing on the stock market in 2018 include Vietnam Technologicaland Commercial Joint Stock Bank (Techcombank), Tien Phong Bank (TPBank) andMaritime Commercial Joint Stock Bank (Maritimebank).
The listing of those banks wouldimprove the attractiveness of the banking sector for investors, according toBIDV Securities Company (BSC).
Bank shares are expected to tradepositively in 2018, as the banking sector seeks to achieve higher creditgrowth, while their non-performing loans would be resolved at a faster pace andthe restructuring of their businesses would improve, BSC said in a report.
The core business of the banking sectoris forecast to go up, BSC said, as Vietnam’s macroeconomic conditions wouldlikely improve, while banks could explore more opportunities, in addition toreceiving revenues from interest income.
The brokerage firm said financiallending in 2018 is predicted to grow by 18-19 percent, thanks to higher demandfor borrowing from the better-performing economy, which is forecast to expandat a 6.5-6.8 percent rate, while commercial banks are allowed to spend 45 percentof their short-term capital for middle- and long-term lending, as regulated bythe State Bank of Vietnam in Circular 19/2017/TT-NHNN, instead of 40 percent,which is regulated by the central bank in the Circular 36/2014/NHTT.
The rate would be reduced to 40 percentstarting in 2019, and such an adjustment would help banks provide middle- andlong-term lending for their customers, especially property developers andconstruction companies that have high and long-term interest rates.
Among all types of credit lending,consumer lending reached a growth rate of 59 percent in 2017, and it isforecast to go up this year, BSC said.
It attributed the prospects of consumerlending to the shift of the business strategy at State-owned banks to focus moreon individual clients and private-equity banks, where VPBank, HDBank, MBBankand Sai Gon-Hanoi Bank (SHB) have also expanded their influence in the consumerfinance segment.
Additionally, financial technology(fintech) would transform tradition-model banks, as both State-owned and jointstock commercial banks would have to compete with each other, as well astechnology firms that provide financial-banking solutions, BSC said.
“That competition may not only pressbanks to suffer from lower profitability growth, but also force them totransform their own business models and update technologies to diversifyproducts and services to meet demand from customers,” BSC said.
According to the Hanoi-based securitiesfirm, the evaluation of Vietnamese bank shares is quite high, compared to theAsia-Pacific region. The average price-to-earnings per share ratio (P/E) andaverage price-to-book value ratio (P/B) of Vietnam’s bank shares are 20.62 and1.54, compared to 11.9 and 1 in the overall Asia-Pacific region.-VNA
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