Vietnamplus

Capital limitations hinder banks from meeting regulations on capital adequacy ratio (CAR) and performing their business due to a series of other regulations.

Vietnamese banks are forecast to gain in profitability this year, but raising capital will be a key focus for banks to meet the State Bank of Vietnam’s strict Basel II requirements.

The State Bank of Vietnam has allowed Vietcombank to apply minimum capital adequacy ratio requirements following Basel II standards one year earlier than the deadline initially set by the central bank.

Vietnam’s finance and banking sector has reduced its ratio of non-performing loans (NPLs) – including both NPLs owned by credit institutions and the Vietnam Asset Management Company – from 17.2 percent in 2012 to 6.7 percent at the end of June 2018.

The Government is directing ministries and agencies to raise capital for State-owned commercial banks through the use of dividends or share sales this year, Deputy Prime Minister Vuong Dinh Hue said at a recent meeting.

Vietcombank will become the first major State-owned bank to apply Basel II standards, two years earlier than the deadline set by the State Bank of Vietnam (SBV).

Prosperous business performance and positive bank share price trends in the stock market are expected to help some commercial banks meet their capital increase deadline as required by the State Bank of Vietnam (SBV).

The current development and future strategies of many local commercial banks are creating confidence about a sustainable growth of the banking sector.

The Orient Commercial Joint Stock Bank (OCB) has become the first Vietnamese bank to complete the implementation of a Basel II project, equipping it with the infrastructure of a modern and safe bank that meets capital, supervisory review and transparency requirements.

The Government’s recent decision on the restructuring of credit institutions ensures that State-owned banks listed on the market no longer have to worry about dividend payout in cash, experts said.

The banking system is expected to further develop this year, as 16 banks have announced plans to increase capital by a total of nearly 37 trillion VND (1.62 billion USD).

The State Bank of Vietnam (SBV) has issued a new circular to prepare for the application of BASEL II standards in the domestic banking system.

The Orient Commercial Joint Stock Bank (OCB) has partnered with Fintek Company and Tess International Company in an anti-money laundering project under an agreement signed on November 9.

Banking experts shared their experiences in applying the Basel II capital adequacy guidelines at an IFC-hosted workshop on August 18 in Hanoi.

The Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) expects to increase its charter capital this year to become more competitive and prepare for Basel II implementation.

Large local banks, which are chosen by the State Bank of Vietnam (SBV) to apply Basel II governance standards, are trying to increase capital to meet the standards.