Vietnam Banking Report 2019

‹#›
NHÀ XUẤT BẢN HỒNG ĐỨC
License No. 2415 - 2019/CXBIPH/88 - 40/HĐ

PART CONTENT PAGE PART CONTENT PAGE
What’s new in this Report 4 5.3 Draft Amendments of Circular 39 72
1 Banking Performace Review 5.4 Draft Amended Law on Securities 76
1.1 Sector Overview 6 5.5 Restructuring the Equities and Insurance Market 82
1.2 Credit Growth 10 5.6 The plan to establish Vietnam Stock Exchange 88
1.3 Deposit Growth 17 5.7 P2P Regulatory Sandbox 91
1.4 Liquidity 20 Appendices
1.5 Capital Adequacy 24 A.1 Key Macroeconomics Indicators 94
1.6 Asset Quality 29 A.2 Profiles of State-Owned Commercial Banks
1.7 Profitability 33 Agribank 102
1.8 Operational Efficiency 37 Vietcombank (VCB) 103
1.9 Banking Listing & Bank Stocks’ Valuation 39 BIDV (BID) 104
2 Capital Markets Vietinbank (CTG) 105
2.1 Fixed Income Market 43 A.3 Profiles of Selected Joint Stock Commercial
Banks
2.2 Equities Market 49 Sacombank (STB) 107
3 M&A and Consolidation 52 Military Bank (MBB) 108
4 Market Trends Asia Commercial Bank (ACB) 109
4.1 Retail Banking in Vietnam 56 Saigon – Hanoi Bank (SHB) 110
4.2 Mobile Payment and Competition from Non-banks 62 Vietnam Prosperity Bank (VPB) 111
5 Major Policy and Regulatory Framework Updates Techcombank (TCB) 112
5.1 Draft Amendments of Circular 36 65 HCMC Housing Development Bank (HDB) 113
5.2 Draft Amendments of Circular 43 69 Vietnam International Bank (VIB) 114
2Financial Information | Business Information | Market Research
Oricombank (OCB) 115
TABLE OF CONTENTS

No. Wor d Stands for
1 ADB Asian Development Bank
2 ATM Automated Teller Machine
3 CAGR Compounded Annual Growth Rate
4 CAR Capital Adequacy Ratio
5 CI Credit Institution
6 CIR Cost-to-Income Ratio
7 FDI Foreign Direct Investment
8 FII Foreign Indirect Investment
9 FIncos Financial Companies
10 FOL Foreign Ownership Limit
11 FTA Free Trade Agreement
12 JSCB Joint-Stock Commercial Bank
13 JV Joint Venture
14 LDR Loan to Deposit Ratio
15 NFSC National Financial Supervision Commission
16 NIM Net Interest Margin
17 NPL Non-performing Loan
18 OMO Open Market Operations
19 POS Point of Sales
20 ROA Return on Asset
21 ROE Return on Equity
22 SBV State Bank of Vietnam
23 SOCB State-Owned Commercial Bank
24 SOE State-Owned Enterprise
25 VAMC Vietnam Asset Management Company
26 VAS Vietnam Accounting Standards
27 YE Year End
28 YoY Year over year
29 YTD Year To Date
Abbreviations

What’s new in this Report
2019 is widely regarded as key in achieving
Vietnam’s restructuring goals for the financial
sectors. The government targets a
sustainable, “more balanced” capital market
structure with strong pillars from the banking
sector, the fixed income and the equities
market. Sectors that could threaten the
stability of the system are to be closely
monitored and even tightened – such as non-
production loans to real estate, consumer
loans and black credit market. As a result,
credit and deposit growths in 2019 are slow
and steady, following the direction of the
policies.
1) Moderate credit growth in 2018
Credit outstanding & YoYgrowth
Credit Outstanding US$bn
Source: FiinGroup from SBV
Credit YoY Growth

What’s new in this Report

Section 1: Banking Performance Review
1.1 Sector Overview
1.2 Credit Growth
1.3 Deposit Growth
1.4 Liquidity
1.5 Capital Adequacy
1.6 Asset Quality
1.7 Profitability
1.8 Operational Efficiency
1.9 Banking Listing & Bank Stocks’ Valuation
Contents

1.1 Sector Overview
Figure 1: Credit and Capital Markets Size, 2016-Q12019 Figure 2: Commercial banks’ total assets by types of banks, 4M2019
National loan book/GDP Stock market cap/GDP C-bonds outstanding/GDP
Source: FiinGroup from SBV, FiinPro, MOF’s SSC
Note: including private placements

Figure 3: Selected banks’ total assets (US$bn), 2014-Q12019 Figure 4: Selected banks’ total owner’s equity (US$bn), 2014-Q12019
Source: FiinGroup from 22 banks, whose assets accounting for 71% of banking sector’s
total assets
1.1 Sector Overview
Source: FiinGroup from 22 banks, whose assets accounting for 71% of banking sector’s
total assets

Figure 5: Ownership Structure by Banks (Listed), 5M2019
Foreign ownership State ownership Other ownership
1.1 Sector Overview
Source: FiinGroup from FiinPro

1.1 Sector Overview
1.2 Credit Growth
1.3 Deposit Growth
1.4 Liquidity
1.6 Asset Quality
1.7 Profitability
Contents

1.2 Credit Growth
Figure 6: Credit outstanding & YoY growth, 2014-2019 (Target) Figure 7: Credit outstanding breakdown by sectors, 2013-2018

Figure 8: Banks Credit Growth Target – 2019 vs Actual 1Q2019
Source: FiinGroup from banks’ announcements at AGM
1.2 Credit Growth
Q12019 2019 Target

Figure 10: Credit Growth of Priority sectors, YTD Q12019Figure 9: National Loan Book by Major Sectors, 2018
Source: FiinGroup fromSBV
Agriculture & rural
development
SMEs
Real estate (home buyers &
developers)
Consumer finance (excl.
housing)
Others
1.2 Credit Growth

Figure 11: Market Size (VNDbn) of CF market (Banks & Fincos)
Figure 12: Loanbook of Banks vs Fincos in Consumer Finance
1.2 Credit Growth

Figure 13: Developers vs Home Buyers loans
Figure 14: Home Buyers’ RE loans (US$bn)
Figure 15: Developers’ RE loans (US$bn)
1.2 Credit Growth

Figure 16: Loan Breakdown by Currency, 2015-1Q2019
Figure 17: Interest rates on loans in VND, 2012-2018
Figure 18: Interest rates on loans in USD, 2012-2018
1.2 Credit Growth

1.1 Sector Overview
1.2 Credit Growth
1.3 Deposit Growth
1.4 Liquidity
1.6 Asset Quality
1.7 Profitability
Contents

1.3 Deposit Growth
Figure 19: Deposit Outstanding & YoY growth, 2013-1Q2019 Figure 20: Credit growth vs Deposit growth YoY, 2013-2018

Figure 21: Interest yield curve on VND deposits, 2012-1Q2019
Figure 22: Interest yield curve on deposits
1.3 Deposit Growth

1.1 Sector Overview
1.2 Credit Growth
1.3 Deposit Growth
1.4 Liquidity
1.6 Asset Quality
1.7 Profitability
Contents

1.4 Liquidity
Figure 23: Loan-to-Deposit Ratio of all credit institutions Figure 24: Loan-to-Deposit Ratio at Vietnamese banks by groups

Figure 25: ST deposit to MLT lending Ratio, All Credit Institutions
Figure 26: Loan and Deposits of Top 10 Banks by tenors (US$mn), 2018
Table 1: Proposed timeline to lower ST deposit to MLT lending ratio
1.4 Liquidity

Figure 27: Vietnam Interbank Interest Rates, 2018-May 2019
1.4 Liquidity

1.1 Sector Overview
1.2 Credit Growth
1.3 Deposit Growth
1.4 Liquidity
1.6 Asset Quality
1.7 Profitability
Contents

1.5 CapitalAdequacy
Figure 28: Capital Adequacy Ratio, 2012 – 2018 Figure 29: CAR of Credit Institutions by Type of Banks (%)

Figure 30: CAR of Banks, YE2018 (%)
1.5 CapitalAdequacy

Table 2: Targeted vs Actual Charter Capital Raise in 2018 (VNDbn)
1.5 CapitalAdequacy
Figure 31: Selected Banks’ capital mobilization estimates, 2012-2018
(VNDbn)

Figure 32: Targeted charter capital raise in 2019 (VNDbn)
1.5 CapitalAdequacy

1.1 Sector Overview
1.2 Credit Growth
1.3 Deposit Growth
1.4 Liquidity
1.6 Asset Quality
1.7 Profitability
Contents

1.6 Asset quality
Figure 33: NPL of banks (%), 2014-1Q2019 Figure 34: NPL Resolution Progress (VNDbn), 2012-1Q2019

Figure 35: Banks’ reported NPL and bad debts at VAMC, 2017 vs 2018 (VNDbn)
1.6 Asset quality

Figure 36: Bad Debt Coverage over outstanding loans, 2015-
Q12019
Figure 37: Provisions for loan-loss over outstanding loans, 2015-
Q12019
1.6 Asset quality

1.1 Sector Overview
1.2 Credit Growth
1.3 Deposit Growth
1.4 Liquidity
1.6 Asset Quality
1.7 Profitability
Contents

1.7 Profitability
Figure 38: Average NIM of Vietnamese banks, 2015-1Q2019 Table 3: ROA & ROE of selected banks, 2018-1Q2019

Figure 40: Average ROE of Vietnamese banks, 2015-1Q2019 (YoY)
Figure 42: ROE by groups of banks
1.7 Profitability
Figure 39: Average ROA of Vietnamese banks, 2015-1Q2019 (YoY)
Figure 41: ROA by groups of banks

Figure 43: Incomes of Vietnamese banks breakdown, 2015-1Q2019 (YoY)
1.7 Profitability

1.1 Sector Overview
1.2 Credit Growth
1.3 Deposit Growth
1.4 Liquidity
1.6 Asset Quality
1.7 Profitability
Contents

Figure 45: Cost-to-Income Ratio by Banks, 2018-1Q2019(%)
Figure 44: Cost-to-Income Ratio of Vietnamese Banks (%)

1.1 Sector Overview
1.2 Credit Growth
1.3 Deposit Growth
1.4 Liquidity
1.6 Asset Quality
1.7 Profitability
Contents

Figure 46: Bank Market Cap as % of Total Market Cap, May 2019
Figure 47: Bank Valuation vs Other Sectors in Vietnam, May 2019

Table 4: Bank Stock Movement, May 2019

Section 2: Capital Markets
2.1 Fixed Income Market
2.2 Equities Market
Contents

Section 2: Capital Market
Figure 48: Fixed Income Market Size and Growth Figure 49: Bonds outstanding as a % of GDP, 2016-2018

Figure 50: G-bond yields thoughout 2018 Figure 51: Winning/Offering Ratio of G-bonds

Figure 52: G-bond investor base

Figure 53: C-bonds outstanding (VNDbn), 2016-2018

Figure 54: C-bonds issuers by volumes issued, 2018
Figure 55: C-bonds issuance by Issuer and Types, 2018
Table 5: Top c-bonds issued in 2018 & 2019

Section 2: Capital Markets
2.2 Equities Market
Contents

2.2 Equities Market
Figure 56: VNIndex closing prices, Jan 2018-May 2019 Figure 57: VNIndex trading volumes (mn shares)
Figure 58: Market Cap 2018-May2019 (US$bn)

2.2 Equities Market
Figure 59: Foreign Net Buying/Selling (US$mn)

Section 3: M&A and Consolidation
Contents

Table 6: Recent Divestments in the Banking Sector

Table 7: Recent Investments in the Banking Sector

Section 4: Market Trends
4.1 Retail Banking in Vietnam
4.2 Mobile Payment and Competition from Non-banks
Contents

Figure 61: Retail Banking & Corporate Banking, 2017 & 2018Figure 60: YoY Growth Corporate vs Retail Banking, 2013-2018
Figure 62: Top 10 Banks with the highest retail loan %, 2018

Figure 64: Market Size (VNDbn) of banks’ CF loans
Figure 63: Proportion of CF loans amongst Banks and Fincos

Table 8: Top Retail Banks in Main CF Product Categories
Figure 65: Banks’ CF Loans by Segment

Figure 66: Number of credit cards issued (accumulated)
Figure 67: Average usage value per credit card (payment+ cash advance)
Figure 68: No. of e-wallet Registered Users by 2018

Figure 69: Premiums revenue (US$bn) and the growth of insurance
market
Figure 70: Insurance Revenue Sources of Vietnamese banks

Contents

Table 9: Vietnam’s Non-cash Progress by 2018
Figure 71: Cash in total liquidity

Figure 73: Transaction volumes by payment channels (millions)
Figure 72: Payment Infrastructure, 2017-2018

Section 5: Major Policy and Regulatory Framework Updates
5.1 Draft Amendments of Circular 36
5.4 Draft Amended Law on Securities
5.5 Restructuring the Equities and Insurance Market
5.6 The plan to establish Vietnam Stock Exchange
5.7 P2P Regulatory Sandbox
Contents

Table 11: Proposed timeline to reduce ST deposit to MLT Lending
Table 10: Major changes in Draft Amendments of Circular 36

Contents

Table 14: Major changes in Draft Amended Law on Securities

Contents

Table 15: Major changes in Restructuring the Equities and Insurance Market

Contents

Table 16: Major changes in The plan to establish Vietnam Stock Exchange

Contents

Table 17: Major changes in P2P Regulatory Sandbox

Appendices
A.1 Key macroeconomics indicators
A.2 Profiles of SOCBs
A.3 Profiles of JSCBs
Contents

A.1 Macroeconomics Key Indicators
GDP
Figure 74: GDP Growth YoY Figure 75: GDP’s composition 1Q2019

Inflation
Figure 76: CPI Growth YoY Figure 77: Retail sales growth YoY (US$mn)

Trade Balance
Figure 78: Trade Balance (US$bn) Figure 79: Vietnam’s Major Trade Partners 2018 (US$bn)

Foreign Investment
Figure 80: FDI 2012-1Q2019 (US$bn) Figure 81: FII 2016-2018 (US$bn)
Table 18: Top 3 FDI projects by value in 2018

Remittance and Foreign Reserves
Figure 82: Overseas Remittance (US$bn) Figure 83: Vietnam’s Foreign Reserves Balances (US$bn)

Budget Deficit and Public Debt
Figure 84: Vietnam Budget Deficit 2012-2018 (US$bn) Figure 85: Vietnam Public Debt 2012-2018

Appendices
A.1 Key macroeconomics indicators
A.2 Profiles of SOCBs
A.3 Profiles of JSCBs
Contents

BUSINESS PROFILE OWNERSHIP STRUCTURE, H12019
KEY FINANCIAL & OPERATIONAL INDICATORS DISTRIBUTION NETWORK
Profiles of key players
Agribank

BUSINESS PROFILE OWNERSHIP STRUCTURE, Q12019
Vietcombank

BIDV

VietinBank

Portal
BConitienntfs orm
Appendices
Macroeconomics Key Indicators
Banks by Key Indicators
Profiles of State-Owned Commercial Banks
Profiles of Key Joint-Stock Commercial Banks

Sacombank

Military Bank

Asia Commercial Bank

Saigon Hanoi Bank

BUSINESS PROFILE OWNERSHIP STRUCTURE, YE2018
Vietnam Prosperity Bank

Techcombank

Ho Chi Minh Development Bank

Vietnam International Bank

BUSINESS PROFILE OWNERSHIP STRUCTURE, M82018
Oricombank

Financial Information | Business Information | Market Research 116
For further inquiries and comment, please
contact our Financial Sector Specialist team
at FiinGroup
Dong Le, CFA
Director
Market Research Services
+84 (024) 3562 69 62(Ext. 110)
+84 (0) 912 057529
dong.le@fiingroup.vn
Head Office
5th Floor, Anh Minh Building
36 Hoang Cau Street
Hanoi, Vietnam
+ 84 (24) 3562 6962
Ho Chi Minh City Branch
3rd Floor, Profomilk Plaza Building
51 - 53 Vo Van Tan, District3
Ho Chi Minh City, Vietnam
+ 84 (28) 3933 3586
Dung Vu
Assistant Manager, Financial ServicesSector
Market Research Services
+84 (024) 3562 6962
+84 (0) 903 574 800
dung.vu@fiingroup.vn

Vietnam Banking Report 2019

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