Vietnam’s credit growth is slowing and can fall behind the central bank’s target of 14 percent for 2019, causing concerns that it could make it difficult for businesses to access bank loans during the remaining months of the year.
The Ho Chi Minh City Development Joint Stock Commercial Bank (HDBank) has reported a record pre-tax profit of 2,211 billion VND (94.26 million USD) in the first half of the year.
Vietnamese banks are seeking to raise capital in international bond markets as they face growing pressure to hike capital to satisfy the central bank's regulations on minimum capital requirements and Basel II standards by early next year.
If banks cannot increase charter capital, they’ll have to reduce credit growth, which could harm the provision of capital to serve economic development.
While private joint stock banks have had some success in raising their charter capital, major banks, except for Vietcombank, are still struggling with this work.
Some experts have said when a bank is unable to have a minimum capital adequacy ratio (CAR) of 8 percent for a long time, it could be put under special control by the central bank.
The Vietnam Maritime Commercial Joint Stock Bank (MSB) has been given an approval from the State Bank of Vietnam (SBV) to apply Basel II standards, raising the total number of Vietnamese banks meeting the global norms to nine.
A plan to allow large Vietnamese State-owned commercial banks to pay dividends in shares or retain dividends would help them accumulate capital and meet regulatory minimum capital thresholds, Fitch Ratings has said.
Local banks have continued issuing a large amount of bonds to raise capital to meet the State Bank of Vietnam (SBV)’s stricter regulations on credit safety limits and capital adequacy.
Authorities have basically agreed on the State Bank of Vietnam (SBV)’s proposal to allow large State-owned commercial banks to retain their dividends or pay them in shares to increase capital.
The Asia Commercial Bank (ACB) late last week was officially given approval from the State Bank of Vietnam (SBV) to apply Basel II standards, raising the number of Vietnamese banks meeting the global norms ahead of the SBV’s schedule to seven.
The State Bank of Vietnam (SBV) has continued to urge relevant ministries to revise legal frameworks in order to allow large State-owned commercial banks to use the State budget for their capital increases.
The Ho Chi Minh City Development Joint Stock Commercial Bank (HDBank) plans to collect 5.07 trillion VND (217 million USD) in pre-tax profits this year, an increase of 27 percent compared to 2018.
Some commercial banks expect to get high credit growth limits set by the central bank this year as they have so far met Basel II’s capital safety and risk management standards ahead of schedule.
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