Some financial indicators in 2020 of 6 banks in the Top 10 prestigious and effective public companies in 2021. Over the past two years, these enterprises have been recognised by economistsand investors for their financial strength and communication capacities, theirgrowth potential, level of sustainable development, quality of corporategovernance and the positions in their industries.
According to analysts, these above-mentioned banks have helped the bankingindustry affirm its position as one of the major pillars of Vietnam’s economyas the sector has contributed to regulating financial supply and demand forbusinesses and individuals, especially in the context of the economy which hasencountered many challenges due to the COVID-19 pandemic.
By the end of June 10, 2021, the banking industry accounted for 34 percent of HoChi Minh Stock Exchange's market capitalisation with the stock prices growing18 percent in one month, 40 percent in three months and 77 percent in sixmonths, respectively.
A JP Morgan report showed that Vietnamese banks offer the best combination ofgrowth and return on equity (ROE) in ASEAN with 18 percent, doubling that ofother countries in the bloc.
Analysts said there are three growth drivers for the strong growth of thebanking industry in the medium and long term including the strength of thelocal economy, self-improvement and digital transformation.
Bright prospect of local economy
According to the World Bank, though Vietnam has been affected by the COVID-19pandemic, the local economy has still gained many positive achievements,demonstrating its sustainable internal strength.
Meanwhile, Vietnam is among the few economies that are predicted to growpositively in the coming years with major drivers being domestic production andconsumption and exports. The banking industry, with its role as a financialsupport for the whole economy, is also forecast to continue growing inresonance with the national economy.
At the same time, Vietnam's population is expected to reach 120 million peopleby 2050, an increase of over 20 percent compared to the present, and theproportion of the middle-class will double from 13 percent to 26 percent by2026. That will open up golden opportunities for banks especially those thathave considered retail business as a core area.
Currently, Vietnam International Bank (VIB), Asia Commercial Bank (ACB), SaiGon Thuong Tin Commercial Joint Stock Bank (STB), Vietnam Prosperity JointStock Commercial Bank (VPBank) and Military Commercial Joint Stock Bank(MBBank) are recognised as five leading private banks with the top retailloans.
Notably, VIB and MBBank rank top with compound growth rate of 49 percent and 31percent respectively over the past five years. VIB has been also considered theleading retail bank as its outstanding retail balance has accounted for over 86percent of total outstanding balance, of which over 95 percent of retail loanshave collateral.
The sector’s strong self-improvement
The banking industry has been experiencing positive changes in recent years.The dynamic business model, the effective application of digital transformationand the significant improvement in internal strength have brought impressivebusiness results.
In addition, the State Bank of Vietnam has accelerated the application of internationalrisk management standards. That has contributed to improving the transparencyof information, enhancing the prestige of local banks to domestic andinternational investors.
Quickly embracing digital transformation
The banking sector’s strong growth in recent years is also attributable to theendless efforts of local banks in quickly embracing digital transformation.These banks which have actively participated in digital transformation willmeet the increasing needs of customers while launching new products andservices to both better serve their clients and increase their businessefficiency.
Among them are VIB, MBBank and Techcombank which have launched digital productpackages such as digital accounts, bank cards and completely free digitalbanking services to better facilitate their customers.
Amid the COVID-19 pandemic, digital solutions offered by these banks haveassisted customers who can make transactions and other basic banking servicesonline instead visiting banks’ branches or transaction offices.
Analysts said banks which have a clear digitalisation strategy will soon boosttheir market share and quickly lead the sector in terms of the growth rate andquality of services offered to customers. That has happened in markets like theUS, Australia and Singapore.
They added with the three above-mentioned growth drivers, the sustainabledevelopment with many distinctive imprints of the six banks in the Top 10 isexpected to be a bright spot for the banking industry and the Vietnameseeconomy as well in the future./.
VNA
