Customers at Agribank (Photo: VietnamPlus)

Hanoi (VNA) –🐠 As many as 88 percent of credit institutions expected their business performance will keep improving in 2019, of which 35 percent anticipated ‘significant improvement’.

In 2018, the slow recovery and potential risks of the world economy, the complicated developments of the US-China trade war, the tightened monetary policy of the US Federal Reserve (Fed) and many other central banks in the world imposed certain impacts on the Vietnamese economy.

⛎ However, under the close and drastic direction of the government together with efforts of ministries, departments, sectors and localities, Vietnam’s economy continued to witness positive changes and reaped encouraging achievements, with gross domestic product (GDP) growth reaching 7.08 percent – the highest level in the past 10 years, while inflation was controlled at a low rate (3.54 percent).

ܫ[Credit to grow by 14 pct, bad debt kept under 2 pct in 2019: SBV]

Improved business performance 

According the survey, the business environment of credit organisations has been improved strongly. Two subjective factors “Policy and customer service of credit institutions” and “Capacity of creativeness and product improvement of credit institutions” as well as two objective factors “The economy’s demand for services and products of credit institutions” and “Business and finance conditions of customers” are expected to be bettered. 

Therefore, the demand for banking products and services increased sharply in 2018 and is predicted to continue rising this year. The demand for loans is hoped to see the highest growth.

About 77.6 percent of credit institutions forecast the demand for banking services will increase, and clients will have the biggest demand for getting loans (80.7 percent of credit institutions), making deposits and using payment services with the expectation rates of 66 percent and 64 percent, respectively.

Overall risks of all client groups in 2018 were evaluated as more stable than in 2017 with 66 percent of the surveyed credit institutions said the risks were normal, 16.5 percent said the risks increased slightly and 17.7 percent said the risks reduced.

While 63.5 percent forecast overall risks of all client groups will remain stable in 2019, 15.3 percent said the risks are likely to decrease and 21.2 percent feared the risks might increase.

Illustrative image (Source: VietnamPlus)

Liquidity remains stable, bad debt likely to drop

Also according to the survey, a majority of the credit institutions believed the banking system’s liquidity in terms of both the Vietnamese dong and foreign currencies will remain positive in 2019.

They said the rate of non-performing loans out of the outstanding credit balance was kept at a low level last year and tends to decline in 2019.

They expect a growth rate at 13.9 percent for capital mobilisation and a credit growth rate at 15.27 percent by the end of this year, with the faster growth in mobilised capital and credit in the Vietnamese dong.

The survey also showed that the banking sector’s labour market continued witness growth as 70.93 percent of credit institutions said they recruited more employees in 2018, while 20.93 percent maintained their workforce and 8.14 percent reduced staff, higher than the forecast level of 3.2 percent.

With optimism about growth prospects for 2019, 76.74 percent of the surveyed credit organisations plan to recruit more this year and 18.61 percent plan to keep the workforce unchanged and 4.65 percent cut the number of employees.

꧃ With positive developments on the monetary market in 2018, credit institutions expected the banking industry’s business performance will keep improving this year while management policies of the State Bank of Vietnam and the Government will help stabilise inflation and ensure enough capital for the economy, therefore fostering the country’s economic growth.-VNA