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2018 was quite a successful year for Vietnamese banks as Moody’s, one of the biggest market rating agencies, has upgraded Vietnam’s credit rating from BA1 to BA3 with “stable outlook.” Besides, Standard&Poor (S&P) Global Rating has also commended Vietnam’s performance and expected that the economy would continue to rise rapidly. These positive results show much-improved institutional settings underpinning consistently strong growth in the economy and the banking sector.
In 2018, the SBV’s monetary policies and other macroeconomic policies were successful in stabilising the economy, settling non-performing loans, curbing inflation, and maintaining sustainable development.
The forum served as a meeting place for experts with deep understanding of emerging trends from the SBV and other large banks such as Vietcombank, HSBC, Sacombank, and organisations like PwC to come together and discuss underlying issues in the industry and solutions for solid improvement.
Experts at a discussion panel at the forum on the development of Vietnamese banks
It is noted that the number of non-performing loans at many banks has plummeted significantly, as indicated by deputy chief inspector of the SBV’s Banking Supervision Agency Nguyen Trong Du. In the context of escalating geopolitical instabilities and global trade turbulences, the Vietnamese banking system has succeeded in stabilising exchange rates, interest rates, and guaranteeing market liquidity thanks to tight and effective monetary policy.
In the government bond market, Vo Tri Thanh, former vice president of the Central Institute for Economic Management, and SBV deputy governor Nguyen Thi Hong agreed that despite the importance of government bonds to capital mobilisation, the market is still small compared to other countries. Issuing more new bond products such as bond derivatives and floating-rate bonds could help.
On the other hand, the Vietnamese government is making substantial progress in designing its bank restructuring strategy, and also welcomes foreign firms to join the process. However, challenges remain in building a transparent and effective legal framework.
|The forum touched on digital technology applications for the development of the Vietnamese banking sector|
The major points of this forum also include digital technology as an engine for the banking industry’s growth. A prominent case here is Thailand-based Kasikorn Bank which invested in technology and focused on customers, as mentioned by Tran Thai Binh, director of the digital banking technology centre at Sacombank.
Kasikorn Bank collects data which can be analysed to understand customers’ needs, thus the bank can make forecasts and introduce new products conducive to business in order to ensure maximum efficiency and competitiveness. “We could learn from our neighbours. Technology is a key to bridge the gap between Vietnamese banks and other developed nations’ banks,” Binh stressed.