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Home / Economy / Banking & Finance
Banks see positive business outlook in 2018
Ngoc Tung 10:12, 2018/04/08
Most credit institutions saw an improvement in business environment and own performance in the first quarter, which are expected to continue growing in the second quarter.
Substantially, credibility rating of various clients groups is positive, informed a survey conducted by the State Bank of Vietnam (SBV) on business trends among credit institutions on March. 
 
Illustration photo.
Illustration photo.

The survey also saw a growing demand of the economy on banking products and services, especially on lending. Liquidity of the banking system remained positive, along with stable interest rate. Capital mobilization and credit are expected to accelerate in second quarter of 2018. 

The most improved factor is "credit institutions' policies and customer services". Another factors saw significant improvement is "demand of the economy on banking products and services". 

Credit institutions also assessed vast improvement in "Administration mechanism and regulations on banks' operation safety" more than other factors in the first quarter. 

For overall assessment in 2018, most credit institutions agreed that 2 factors "demand of the economy on banking products and services" and "Clients' business and financial conditions" will continue growing compared to 2017. 

Credibility of clients at present is assessed more positive than in previous quarter, for which 76% of credit institutions assessed the overall risk of this client group at "moderate", 18% of credit institutions assessed at "low", comparing to the rate of 76% and 15% at previous quarter, respectively. 

Comparing to previous quarter, the risk of foreign invested enterprises (FIEs) is assessed at "more stable" and "lower" than other enterprises, as well as the lowest risk among other groups. 

It is expected that in the second quarter and of the whole year 2018, 61-75% of credit institutions forecasted the overall risks of client groups at "moderate", 9 - 22% of credit institutions expected risks to be lower than in the fourth quarter of 2017 and of the whole year 2017. 

Client's demand on banking products and services are expected to continue growing. 64-69% of credit institutions expected the overall demand of clients will increase in the second quarter and of 2018; in which, demand for lending is the most improved factor with the assessment of 68 - 69.4% of credit institutions. 

Liquidity of the banking system continued improving compared to previous quarter, which is maintained at "good" for both Vietnam dong and foreign currencies, which are expected to gain momentum in the coming quarters and of 2018. 

On the basis of assessment and expectation for favorable business environment, along with stable interest rate, credit institutions expected the average growth rate of capital mobilization at 4.71% in second quarter and 16.65% in the whole year. 

Deposit in short term from 6 months - 1 year is expected to be in the focus, accounting for 83 - 86%, instead of under 6 months  (77 - 82%) in second quarter and of 2018. 

Credit growth is expected to be at 4.85% in second quarter and 16.3% for the whole year, equivalent to the target of 16.65% of the average capital mobilization rate of the entire sector. 

Business performances of credit institutions continue a slight growing in the first quarter comparing to previous quarter. 75% of credit institutions expected there will be improvement in second quarter and 84% with improvement for the whole year, while 22 - 28% expected much improvement. 

By the end of 2018, 72.7% of credit institutions expected own pre-tax profit to be positive compared to 2017, with an average growth rate of 18.2% of the entire sector, lower than the growth rate of 19.3% in the previous survey. 
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