Future bright for local banks

Hanoi (VNA) - Business performance of commercial banks is forecast to continue its upward trend in 2018 after making significant improvements last year, according to a State Bank of Vietnam (SBV) survey.

According to the business sentiment survey, which covered domestic and foreign commercial banks in Vietnam, released on January 4, 71.8 percent of the respondents expected better results in Q1 2018 compared with Q4 2017 and 88.6 percent hoped their business performance this entire year will further improve against last year, of which 29.2 percent anticipated "significant improvement."

Up to 92.6 percent of the correspondents forecast their pre-tax profit in 2018 would rise compared with last year, helping the average growth rate of the entire banking system reach 19.33 percent, much higher than the 13.4 percent forecast in a survey conducted at the same time last year.

A total of 78.1 percent of the correspondents also expected customer demands for banking services, especially lending, this year will increase in comparision with last year. The rate for Q1 2018 alone is 59 percent.

According to the survey that was conducted in Q4 2017, 56.3 percent of the correspondents said their performance currently is "good," higher than the rates of 52.2 percent in the Q3 2017 survey and 54 percent in the same period of 2016.

A total of 85.5 percent of the correspondents also said their performance in 2017 was better than 2016, of which 31.3 percent saw a "significant improvement."

Compared with the previous survey conducted in Q3 2017, banks were also more optimistic about credit growth and capital mobilisation this year.

Banks forecast that the banking system’s credit growth would reach 4.74 percent in Q1 2018 and 17.65 percent this entire year.

The respondents also anticipated capital mobilisation of the entire banking system this year would reach 16.66 percent, of which the rise in Q1 would be 4.46 percent.

Banks also said that the liquidity of the banking system in both Vietnamese dong and foreign currencies is currently ‘good’ and the positive status will be remained in this entire year.

They also forecast that the non-performing loan (NPL) ratio at all banks will reduce, making the NPL ratio of the entire banking system average at 2.43 percent.

With optimism about the growth prospects for 2018, banks also anticipated the industry’s labour market would see positive changes in the coming months.

According to the survey, 52.1 percent of the respondents would increase their recruitment in Q1 2018, while 68.7 percent expected more recruitment this entire year.

Despite conducting more recruitment in Q4 2017, 25.3 percent of the correspondents said they are still short of employees.-VNA