Stable outlook for VN’s banking system on robust economic growth
Stable outlook for Vietnam’s banking system on robust economic growth: Moody’s
Credit ratings agency Moody’s Investors Service on August 19 said its stable outlook for Vietnam’s banking system reflects the country’s robust economic performance, which will support asset quality and profitability.
Hanoi (VNA) - Credit ratings agency Moody’s Investors Service onAugust 19 said its stable outlook for Vietnam’s banking system reflects thecountry’s robust economic performance, which will support asset quality andprofitability.
According to Rebaca Tan, a Moody’s Assistant VicePresident and Analyst, Vietnam’s GDP growth is forecast to moderate to 6.7percent in 2019 and 6.5 percent in 2020 from 7.1 percent in 2018, but even atthese projected rates the country will still remain the fastest-growing economyin the Southeast Asia.
Vietnam’s commercial banks have been cleaning up their balance sheets,supporting asset quality, and problem loan ratio of the bank system is expectedto decline to 4.8 percent at the end of 2020 from 5.1 percent at the end of2018, Tan said.
Capital ratios should remain broadly stable over the next 12-18 months, backedby growth in retained earnings, although a number of banks will need to raisecapital to meet stricter Basel II capital requirements while sustaining assetgrowth.
Profitability will improve as the banks increase their lending to the higheryielding retail and small and medium enterprise (SME) segments, while creditcosts will remain stable when banks continue to make provisions against legacyproblem assets.
The Vietnamese Government will continue to provide support when needed, mainlyin the form of liquidity assistance and regulatory forbearance, as it has donein the past.-VNA
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Transactions at Techcombank (Photo: VNA) 
