Vietnamplus

Vietnam International Bank (VIB) has become the first bank in Vietnam to complete the three pillars of Basel II, which are minimum capital, supervisory review and market discipline.

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.

Profit growth of Vietnamese banks in 2019 is forecast to be lower than last year, but experts say this should not be cause for concern.

Banks have increased their interest rates on certificates of deposit (CDs), bringing them in excess of 10 percent per year with the aim of mobilising long-term capital.

Banks have been the main player in the corporate bond market so far this year, with eight of the top 10 biggest issuers being financial institutions.

If banks cannot increase charter capital, they’ll have to reduce credit growth, which could harm the provision of capital to serve economic development.

Many of them have paid dividends in shares, issued bonus stocks, or even asked to retain their dividends.

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.

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 capital adequacy ratio (CAR) of Vietnam's credit institutions has improved thanks to their increased equity.

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.

More than 9.1 trillion VND (391 million USD) worth of corporate bonds were issued in the first quarter of 2019, up 222 percent year on year.

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.

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.

The Vietnam Technological and Commercial Joint Stock Bank (Techcombank) has targeted a pre-tax profit of more than 11.7 trillion VND (504.3 million USD) in 2019, representing a 10 percent year-on-year increase.

2020 is believed to be a do-or-die year for banks since the SBV has decreed that they must all meet global capital adequacy norms, according to analysts.

Leaders of the State Bank of Vietnam (SBV) and commercial banks have asked the government to promptly handle capital increase for State-owned commercial banks.