Illustrative photo (Source: VNA) BIDV Senior Executive Vice President Tran Phuong said it is a result of research by a team of ADB and BIDV experts.
This is the first time a Vietnamese financial institution has collaborated with ADB to make a comprehensive assessment report on the Vietnamese financial market, covering the fields of banking, securities, and insurance, he noted.
Looking back at 2021, the report states that the world economy recovered quite quickly along with a rapid increase in inflation due to the majority of countries reopening socio-economic activities. The global financial market continued its fast recovery given the new normal condition and strengthened confidence.
In that context, Vietnam's economy recovered quite quickly thanks to an appropriate change in epidemic prevention strategy, which allowed reopening from the beginning of the fourth quarter of 2021. As a result, growth in the quarter reached 5.22 percent, compared to minus 6.02 percent in the third quarter, helping the economy expand 2.58 percent for the entire year. Meanwhile, inflation was kept at a low level of 1.84 percent last year. Vietnam's financial market maintained a positive growth momentum thanks to stable macroeconomy and the implementation of fiscal and monetary policies in support of people and businesses.
In the banking sector, combined pre-tax profit of 29 commercial banks that account for 80 percent of the market surged nearly 32 percent, while their operational costs reduced by 15 percent. At the same time, the banking sector continued with programmes on debt restructuring and supporting pandemic-affected customers with total value of 52 trillion VND in 2021 and 20-25 trillion VND in 2022.
The stock market saw the benchmark VNIndex go up 35.7 percent, and the market capitalisation increase by 48.4 percent. The number of trading accounts reached a record 1.5 million.
The insurance market maintained a growth trend, with revenues reaching 217 trillion VND in 2021, up nearly 19 percent from the previous year.
However, the report points to emerging risks on the banking market such as rising potential bad debts, an increase in financial crimes, the downward adjustments on the stock market, or market manipulation.
Dr. Can Van Luc, Chief Economist of BIDV, said Vietnam’s economy is forecast to better recover this year to grow 5.5-6 percent. Such growth is also projected to come with high inflation rate at about 3.8-4.2 percent, he added.
Luc said the financial market will benefit from the recovery, with the banking industry’s profit expected to grow by 20-25 percent on an annual average and the insurance market sustaining its growth. The stock market, meanwhile, is forecast to make necessary adjustments to become more stable and healthier.
However, the report points to emerging risks on the banking market such as rising potential bad debts, an increase in financial crimes, the downward adjustments on the stock market, or market manipulation.
Dr. Can Van Luc, Chief Economist of BIDV, said Vietnam’s economy is forecast to better recover this year to grow 5.5-6 percent. Such growth is also projected to come with high inflation rate at about 3.8-4.2 percent, he added.
Luc said the financial market will benefit from the recovery, with the banking industry’s profit expected to grow by 20-25 percent on an annual average and the insurance market sustaining its growth. The stock market, meanwhile, is forecast to make necessary adjustments to become more stable and healthier.
Recommendations made in the report focus on completing a legal framework and policies on handling bad debts and making the securities and bonds markets healthier, improving risk control in the financial system and accelerating the building of institutions and a legal corridor for the management and development of the digital economy, digital finance and digital banking./.
VNA
