In keeping with the Basic Statistics Workplace, as of June 30, 2021, credit score development of the entire economic system reached 5.47% (on the identical time in 2020, credit score elevated solely 2.45%). In the meantime, capital mobilization solely elevated by 3.13% (in the identical interval of 2020 it elevated by 4.35%).
Thus, credit score development within the first 6 months was twice the credit score development in the identical interval in 2020 however deposit development was low and disproportionate, solely two thirds of the identical interval. This is without doubt one of the challenges posed to business banks when they could have to extend deposit charges to draw deposits again and get mortgage capital, however they nonetheless must decrease lending charges earlier than requesting from regulators. to accompany the economic system.
Not solely that, the 4th outbreak of COVID-19 brings extra challenges to the banking trade when many giant cities apply distancing measures below Directive 16, companies droop operations, dissolve larger. Dr. Vo Tri Thanh, Director of the Institute for Model Technique and Competitors, forecast that GDP development within the third quarter of 2021 may very well be very low, even 0% if the Authorities can’t management the epidemic in August. .
Too many challenges are coming to the banking system on the identical time. Many evaluations of the profitability of this trade from securities firms have begun to be extra cautious.
Nhadautu.vn had an alternate with Dr. Nguyen Tri Hieu, Banking and Finance professional on forecasts for the banking trade within the second half of 2021.
Dr. Nguyen Tri Hieu, Banking and Finance professional. Picture: Web.
Please let me know, given the difficulties attributable to the COVID-19 epidemic, particularly with this 4th outbreak, can the credit score development goal of about 12% in 2021 set by the State Financial institution be achieved? ?
Dr. Nguyen Tri Hieu: As of June 2021, credit score development is 5.47%, so the goal of 10-12% credit score development for the entire yr isn’t too tough. Nevertheless, in my view, what’s extra necessary than the current time, isn’t the variety of credit score development indicators is the place credit score is definitely flowing and the way a lot of it’s being affected by the COVID epidemic. -19?
It’s essential to have basic and official statistics from the State Financial institution of Vietnam (SBV) on enterprises with excellent financial institution loans affected by the epidemic. In addition to needing combination numbers on how a lot the debt stability is affected by the epidemic to foretell the affect on the entire trade in 2021 and the next years.
The SBV also needs to assessment the commitments of banks to scale back rates of interest or accompany companies. Banks could not dare to boost rates of interest, however lowering rates of interest will likely be totally different amongst banking teams.
The group of state-owned business banks will likely be compelled to scale back lending charges to implement the Authorities’s coverage. Nevertheless, not all beneficiaries with excellent loans are beneficiaries, however just some teams. As for personal business banks, it isn’t straightforward to scale back rates of interest as a result of they nonetheless rely on deposit rates of interest and capital stability.
The truth is, because of the affect of the COVID-19 pandemic, many individuals have been compelled to withdraw their financial savings to reside, and companies additionally needed to withdraw cash to keep up manufacturing and enterprise actions within the context of financial institution loans. harder. As of June 2021, financial institution deposits elevated by solely 3.13% (in the identical interval of 2020 it elevated by 4.35%), whereas credit score development of 5.47% confirmed an asymmetry. In the end banks should elevate deposit charges to draw deposits again.
By the tip of June, the overall quantity of 27 listed banks’ deposits on the SBV decreased by 10% in comparison with the start of the yr, to VND 308.662 billion, equal to about 4% of whole deposits from clients. , displaying that the “idle” money circulation at flat homes can be drying up.
So, in your opinion, how will banking earnings be affected within the second half of 2021?
Dr. Nguyen Tri Hieu: Banks nonetheless report giant earnings in 2020 and the primary half of 2021. Nevertheless, because of the distinction in rate of interest cuts, in addition to credit score and deposit development, there will likely be a divergence in financial institution earnings within the second half of the yr. 2021.
When it comes to books, financial institution earnings will nonetheless improve however is not going to improve as strongly as within the first 6 months of the yr. The principle purpose comes from credit score development, together with the extension of time for threat provisioning in line with Round 03 and the supplementary round to Round 03 being designed by the SBV.
Nevertheless, if we have a look at actuality, we’ll see a way more “darkish” image of financial institution earnings. I actually surprise, why within the situation that the economic system is stagnant, companies are dissolved, and their operations are suspended, however banks nonetheless hold reporting huge earnings? Is that revenue actual? And whether it is, then it’s a paradox.
Enterprise banking, searching for revenue primarily based on the expansion of the economic system, the event of the enterprise. Within the present context, when many huge cities “freeze” (these cities contribute nearly all of GDP), however banks nonetheless have good numbers on their monetary statements, it’s essential to rethink. find out how to account for unhealthy debt, accrued curiosity prior to now 1 yr.
For my part, the actual earnings of the banks are a lot decrease than the numbers on the books. When the entire economic system struggled, companies stopped working, banks couldn’t report earnings perpetually.
Dr. Can Van Luc stated that the goal of 10-12% credit score development within the banking trade in 2021 is possible. Nevertheless, because of the delay, the affect of the epidemic on the banking and finance group will likely be slower than in lots of different fields. The epidemic will trigger unhealthy debt to extend and the financial institution’s profitability this yr in addition to the subsequent few years to lower or decrease development.
In keeping with estimates with Round 03 (SBV), banks this yr should make an extra threat provision of about VND 40,000-44,000 billion, it’s estimated that this yr’s financial institution revenue will solely improve by about 15%.