BANKING INDUSTRY REPORT Q2/2018

Transcription

1 BANKING INDUSTRY REPORT Q2/2018 1

2 Content Executive summary Interbank interest rate movement of some countries Macroeconomic situation affecting the banking industry Some basic indicators of Vietnam banking industry International context World economy overview Current situation of world economy Domestic context Domestic economy overview Current situation of domestic economy Policies of ministries, departments and the Government Objectives of macroeconomic policies in Policies of ministries, departments and the Government Policies of the State Bank of Vietnam 22 2 Banking performance evaluation Operations of world banking system Outstanding policies of central banks over the world and in the region Mobilization and loans Interest rate and exchange rate Balance of Payment Total liquidity Operations of the State Bank of Vietnam Interest rate Exchange rate OMO market Required reserve Operations of commercial bank system in Vietnam Banking activity overview Banking network development and payment system of banks Performance evaluation of some typical banks Exchange rate movement of some currencies over the world Outlook and forecast 83 2

3 Abbreviation AMC Asset Management Company SBV State Bank of Vietnam ATM Automated Teller Machine CB Commercial Bank RE Real Estate ODA Official Development Assistance BOP Balance of Payment OECD Organization for Economic Co-operation and Development MP Monetary Policy POS/EDC/ETF Credit Card Machine DATC Vietnam Debt and Asset Trading Corporation EO Economic Organization FDI Foreign Directed Investment CI Credit Institution IMF International Monetary Fund VAMC Vietnam Asset Management Company IB Interbank VIRAC Vietnam Industry Research and Consultancy JSC 3

4 Executive summary Banking industry in the first 3 months have achieved many remarkable results such as: In addition, there are some limitations that the banking sector must continue to improve in the future: It is forecasted that the banking sector will continue to operate stably without major fluctuations in

5 Content 1. Macroeconomic situation affecting the banking industry 1.1 International context 1.2 Domestic context 1.3 Policies of ministries, departments and the Government 5

6 1. Macroeconomic situation affecting the banking industry 1.1 International context World economy overview World economy recovery in 2017 was quite clear. Economic growth and commodity prices, e % Increase in global trade is a key driving force boosting world economy. Source: VIRAC, IMF Global economic growth, /2018 Economy in the EU region continues to grow strongly. Source: VIRAC, World Bank 6

7 1. Macroeconomic situation affecting the banking industry 1.1 International context Current situation of world economy Economic growth in ASEAN, F USD billion GDP of ASEAN countries, Source: VIRAC, ADB Source: VIRAC, Bloomberg 7

8 1. Macroeconomic situation affecting the banking industry 1.1 International context Current situation of world economy The general inflation rate of the world and other major economies tended to increase slightly compared to % Global inflation rate and in some economic regions, M/2016e However, the inflation rate in 2016 was still lower than that in Source: VIRAC, IMF, WB, GSO % Inflation rate in some countries and in the region, M/2016e Source: VIRAC, IMF, WB, GSO 8

9 1. Macroeconomic situation affecting the banking industry 1.1 International context Current situation of world economy In 2017, world commodity prices continued to fluctuate on upward trend, mainly due to sharp rise in energy and metal prices and little volatility of food prices. Basic commodity prices in the world, f Indicator Unit e 2018f e Change 2017e- 2018f Source: VIRAC, World Bank World commodity prices, Source: VIRAC, World Bank 9

10 Content 1. Macroeconomic situation affecting the banking industry 1.1 International context 1.2 Domestic context 1.3 Policies of ministries, departments and the Government 10

11 1. Macroeconomic situation affecting the banking industry 1.2 Domestic context Domestic economy overview 2018 is the third year in the whole country to implement the "Five-year Socio-economic Development Plan ", taking place in the context of world economic breakthrough growth, vibrant global trade, especially good import export activities in emerging and developing markets, and increase in commodity prices due to increasingly high demand, etc. In 2018 there are several important political and economic events as follows: 11

12 1. Macroeconomic situation affecting the banking industry 1.2 Domestic context Current situation of domestic economy In the first 3 months of 2018, economic growth reached 7.38%, keeping positive trend since the end of Economic growth, M/2018 Indicator (Unit: VND trillion) 3M/201 8 GDP Agriculture, Forestry and Fishing Industry and Construction Services Products taxes less subsidies on production Economic growth rate, M/2018 Source: VIRAC, GSO Source: VIRAC, GSO 12

13 1. Macroeconomic situation affecting the banking industry 1.2 Domestic context Current situation of domestic economy Share of Vietnam's GDP by economic sector, M/2018 Source: VIRAC, GSO 13

14 1. Macroeconomic situation affecting the banking industry 1.2 Domestic context Current situation of domestic economy In 2017, the economy in general and commodity market in particular continued to flourish VND trillion Retail sales of consumer goods and services, M/2018 Source: VIRAC, GSO % Growth rate of retail sales of consumer goods and services, M/2018 Source: VIRAC, GSO 14

15 1. Macroeconomic situation affecting the banking industry 1.2 Domestic context Current situation of domestic economy Consumer price index (CPI) in the first 3 months of 2018 has many changes. Overall consumer price index and commodity groups in the CPI basket, M/2018 Source: VIRAC, GSO VND/kg Price movement of some basic commodities, M/2018 *Petrol price unit: VND/liter Source: VIRAC, Agency of Price Management 15

16 1. Macroeconomic situation affecting the banking industry 1.2 Domestic context Current situation of domestic economy Other economic indicators: Some macroeconomic indicators of Vietnam, M/2018 VND trillion % Some macroeconomic indicators, M/2018 Source: VIRAC, GSO Source: VIRAC, GSO 16

17 1. Macroeconomic situation affecting the banking industry 1.2 Domestic context Current situation of domestic economy FDI and commodity import-export value, M/2018 USD billion Source: VIRAC, GSO FDI and commodity import-export growth, M/2018 Source: VIRAC, GSO 17

18 Content 1. Macroeconomic situation affecting the banking industry 1.1 International context 1.2 Domestic context 1.3 Policies of ministries, departments and the Government 18

19 1. Macroeconomic situation affecting the banking industry 1.3 Policies of ministries, departments and the Government Objectives of the macroeconomic policies in 2018 Objectives of the macroeconomic policies in

20 1. Macroeconomic situation affecting the banking industry 1.3 Policies of ministries, departments and the Government Policies of ministries, departments and the Government Policies of the ministries, industries and the Government 20

21 1. Macroeconomic situation affecting the banking industry 1.3 Policies of ministries, departments and the Government Policies of the State Bank of Vietnam Important regulatory policies affecting the banking sector in

22 1. Macroeconomic situation affecting the banking industry 1.3 Policies of ministries, departments and the Government Policies of the State Bank of Vietnam Important operating policies in the first three months of 2018 by the State Bank of Vietnam 22

23 1. Macroeconomic situation affecting the banking industry 1.3 Policies of ministries, departments and the Government Policies of the State Bank of Vietnam Thoroughly resolving bad debts through Decree 61/2017/ND-CP and Resolution 42/2017/QH14. 23

24 1. Macroeconomic situation affecting the banking industry 1.3 Policies of ministries, departments and the Government Policies of the State Bank of Vietnam Interest rate support through Decision 1424/QD-NHNN and 1425/QD-NHNN 24

25 1. Macroeconomic situation affecting the banking industry 1.3 Policies of ministries, departments and the Government Policies of the State Bank of Vietnam 25

26 1. Macroeconomic situation affecting the banking industry 1.3 Policies of ministries, departments and the Government Policies of the State Bank of Vietnam 26

27 Content 2 Banking performance evaluation 2.1 Operations of world banking system 2.2 Some basic indicators of Vietnam banking industry 2.3 Operations of the State Bank of Vietnam 2.4 Operations of commercial bank system in Vietnam 27

28 2.1 Operations of world banking system Outstanding policies of central banks over the world and in the region World s top largest economies: Fed Funds Rate, Federal Reserve System (FED): Year Beginning of the year Increase time Decrease time End of the year Source: VIRAC, FED Interest rate movement according to Fed Funds Rate, % Source: VIRAC, FED 28

29 2.1 Operations of world banking system Outstanding policies of central banks over the world and in the region European Central Bank (ECB): Interest rate of ECB, Year Beginning of the year Increase time Decrease time End of the year Source: VIRAC, ECB Interest rate of ECB, % Source: VIRAC, ECB 29

30 2.1 Operations of world banking system Outstanding policies of central banks over the world and in the region Bank of Japan (BOJ): Interest rate of BOJ, Year Beginning of the year Increase time Decrease time End of the year Source: VIRAC, BOJ % Interest rate of BOJ, Source: VIRAC, BOJ 30

31 2.1 Operations of world banking system Outstanding policies of central banks over the world and in the region Some economies in the region Year Interest rate of PBOC, Beginning of the year Increase time Decrease time End of the year People s Bank of China (PBOC): Source: VIRAC, Global Rate % Interest rate of PBOC, Source: VIRAC, Global Rate 31

32 2.1 Operations of world banking system Outstanding policies of central banks over the world and in the region Other central banks in Asean region: 32

33 2.1 Operations of world banking system Exchange rate movement of some currencies over the world USD was devalued on the international market Exchange rates of some currencies in the world, Indicator Exchange rate Change (%) USD Index, Source: VIRAC, Investing.com Source: VIRAC, Investing.com 33

34 2.1 Operations of world banking system Interbank interest rate movement of some countries Interbank interest rate in some countries in the world: Interbank interest rate in some countries, Indicator Interest rate (Unit: %) Source: VIRAC, OECD Interest rate movement of the interbank market in the world, % Source: VIRAC, OECD 34

35 Content 2 Banking performance evaluation 2.1 Operations of world banking system 2.2 Some basic indicators of Vietnam banking industry 2.3 Operations of the State Bank of Vietnam 2.4 Operations of commercial bank system in Vietnam 35

36 2.2 Some basic indicators of Vietnam banking industry Mobilization and loans Some indicators of banking industry Total liquidity, capital mobilization and credit to the economy, /2018 Indicator /2018 Total liquidity Total capital mobilization in the economy Credit to the economy Total liquidity Total capital mobilization in the economy Credit to the economy Value (VND trillion) Growth rate compared to the end of last year VND trillion Source: VIRAC, SBV Source: VIRAC, SBV 36

37 2.2 Some basic indicators of Vietnam banking industry Mobilization and loans Loan to deposit ratio (LDR), 8/2016-3/2018 Source: VIRAC, SBV % Loan to deposit ratio, 2/2018 Source: VIRAC, SBV 37

38 2.2 Some basic indicators of Vietnam banking industry Mobilization and loans Total Credit to the economy, /2018 Indicator /2018 Agriculture, Forestry and Fishing Industry and Construction Industry Construction Trading, transport and telecommunication Trade Transport and telecommunication Other services Value (VND trillion) Growth rate compared to the end of last year (%) Total Agriculture, Forestry and Fishing Industry and Construction Industry Construction Trading, transport and telecommunication Trade Transport and telecommunication Other services Source: VIRAC, SBV 38

39 2.2 Some basic indicators of Vietnam banking industry Mobilization and loans Structure of credit outstanding balance, /2018 (%) Total Agriculture, Forestry and Fishing Industry and Construction Industry Construction Trading, transport and telecommunication Trade Transport and telecommunication Other services /2018 Source: VIRAC, SBV 39

40 2.2 Some basic indicators of Vietnam banking industry Interest rate and exchange rate VND Average interbank VND/USD exchange rate, /2018 Source: VIRAC, SBV 40

41 2.2 Some basic indicators of Vietnam banking industry Interest rate and exchange rate Interest rates on the market 1 have been stable since 2015 Average mobilizing and lending rates, e Source: VIRAC, NFSC Marginal interest income ratio, e Source: VIRAC, NFSC 41

42 2.2 Some basic indicators of Vietnam banking industry Balance of Payment Balance of International Payment, e Balance of International Payment, Source: VIRAC, NFSC Indicator Current account Goods (net) Services (net) Investment income (net) Transfers Financial account Direct Investment (net) Portfolio Investment(net) Other Investment (net) Net Errors and Omissions Overall balance Reserve and related items Source: VIRAC, SBV 42

43 2.2 Some basic indicators of Vietnam banking industry Total liquidity VND trillion Total liquidity, /2018 Source: VIRAC, SBV Total liquidity structure, /2018 Source: VIRAC, SBV 43

44 Content 2 Banking performance evaluation 2.1 Operations of world banking system 2.2 Some basic indicators of Vietnam banking industry 2.3 Operations of the State Bank of Vietnam 2.4 Operations of commercial bank system in Vietnam 44

45 2.3 Operations of the State Bank of Vietnam Interest rate Over the past three years, the SBV has almost no use for interest rates in the economy except for the early Indicator Basic interest rate Refinancing interest rate Re-discount interest rate Some interest rate policies announced by the SBV, Beginnin g of the year Adjustments End of the year 2014 Increase Decrease 2017 Overnight rate Interest rate of SBV, /2018 Source: VIRAC, SBV Source: VIRAC, SBV 45

46 2.3 Operations of the State Bank of Vietnam Exchange rate VND thousand Exchange rate movement at SBV, /2018 Source: VIRAC, SBV 46

47 2.3 Operations of the State Bank of Vietnam Exchange rate 47

48 2.3 Operations of the State Bank of Vietnam OMO market Day Forward interest rate of mortgages and bonds auction on OMO market, % Open market operations and bonds auction of SBV, Indicator Value (Unit: VND trillion/%) Mortgages on the open market Average awarded interest rate Average awarded term Awarded amount Bonds auction of SBV Average awarded interest rate Average awarded term Awarded amount Source: VIRAC, SBV Source: VIRAC, SBV 48

49 2.3 Operations of the State Bank of Vietnam Required reserve Required reserve ratio Indicator End of 2014 Adjustments Increase Decrease End of 2017 Source: VIRAC, SBV 49

50 2.3 Operations of the State Bank of Vietnam Required reserve Required reserve ratio classified by types of credit institution and currency % Source: VIRAC, SBV 50

51 Content 2 Banking performance evaluation 2.1 Operations of world banking system 2.2 Some basic indicators of Vietnam banking industry 2.3 Operations of the State Bank of Vietnam 2.4 Operations of commercial bank system in Vietnam 51

52 2.4 Operations of commercial bank system in Vietnam Banking activity overview % Credit growth in 3 months, e Source: VIRAC, GSO Structure of Consumer Loans, 2017 Source: VIRAC, NFSC 52

53 2.4 Operations of commercial bank system in Vietnam Banking activity overview % Interbank interest rate, /2018 Source: VIRAC, SBV 53

54 2.4 Operations of commercial bank system in Vietnam Banking activity overview Some indicators of banking system, VND trillion Assets, ROAA and ROAE of commercial bank system, % Indicator Value (VND trillion) Total assets** Total mobilization Total credit Growth rate (%) Total assets** Content is intentionally removed Total mobilization for demo purpose Total credit Source: VIRAC, SBV Business performance indicators and banking sector safety ratios(%) ROAA ROAE CAR Credit to mobilization ratio Short-term capital to medium-long term loan ratio Source: VIRAC, SBV 54

55 2.4 Operations of commercial bank system in Vietnam Banking activity overview Scale of operations, profits and business performance of the banking industry 55

56 2.4 Operations of commercial bank system in Vietnam Banking activity overview Scale of operations, profits and business performance of the banking industry % Some indicators of the whole banking system by credit institutions, 2017 Source: VIRAC, SBV 56

57 2.4 Operations of commercial bank system in Vietnam Banking activity overview Scale of operations, profits and business performance of the banking industry 57

58 2.4 Operations of commercial bank system in Vietnam Banking activity overview Scale of operations, profits and business performance of the banking industry 58

59 2.4 Operations of commercial bank system in Vietnam Banking activity overview 59

60 2.4 Operations of commercial bank system in Vietnam Banking activity overview Bad debt ratio decreased remarkably in Bad debt ratio movement, e Source: VIRAC, NFSC 60

61 2.4 Operations of commercial bank system in Vietnam Banking activity overview VND trillion Provision for credit losses, e Source: VIRAC, NFSC 61

62 2.4 Operations of commercial bank system in Vietnam Banking activity overview 62

63 2.4 Operations of commercial bank system in Vietnam Banking activity overview Minimum Capital Adequacy Ratio, e Source: VIRAC, NFSC Equity capital of 3 state-owned commercial banks according to Basel II, Source: VIRAC, NFSC 63

64 2.4 Operations of commercial bank system in Vietnam Banking network development and payment system of banks Network structure by type of bank, 2016 Bank Dealing room * Bank Dealing room * Source: VIRAC * Summarized from banks' websites Source: VIRAC 64

65 2.4 Operations of commercial bank system in Vietnam Banking network development and payment system of banks 65

66 2.4 Operations of commercial bank system in Vietnam Banking network development and payment system of banks Dealing room structure by region, 2016 Access ability to dealing rooms, 2016 Source: VIRAC Source: VIRAC The network of banks still has many shortcomings. 66

67 2.4 Operations of commercial bank system in Vietnam Banking network development and payment system of banks Development of payment equipment, Q1/2018 Source: VIRAC, SBV Development of payment system, 2014 Q1/2018 VND billion Thousand items Source: VIRAC, SBV 67

68 2.4 Operations of commercial bank system in Vietnam Banking network development and payment system of banks Thousand items Non-cash payments, Q1/2018 VND billion Source: VIRAC, SBV 68

69 2.4 Operations of commercial bank system in Vietnam Performance evaluation of some typical banks 69

70 2.4 Operations of commercial bank system in Vietnam Performance evaluation of some typical banks Total assets, Unit: VND billion Source: VIRAC, Summarized from banks' financial statements 70

71 2.4 Operations of commercial bank system in Vietnam Performance evaluation of some typical banks Mobilization and loans, Source: VIRAC 71

72 2.4 Operations of commercial bank system in Vietnam Performance evaluation of some typical banks Profits from forex trading, Unit: VND billion Source: VIRAC, Summarized from banks' financial statements 72

73 2.4 Operations of commercial bank system in Vietnam Performance evaluation of some typical banks Profit after tax, Unit: VND billion Source: VIRAC, Summarized from banks' financial statements 73

74 2.4 Operations of commercial bank system in Vietnam Performance evaluation of some typical banks Net interest income, Unit: VND billion Source: VIRAC, Summarized from banks' financial statements 74

75 2.4 Operations of commercial bank system in Vietnam Performance evaluation of some typical banks Profits from service business, Unit: VND billion Source: VIRAC, Summarized from banks' financial statements 75

76 2.4 Operations of commercial bank system in Vietnam Performance evaluation of some typical banks Profits from investment and stock trading activities, Unit: VND billion Source: VIRAC, Summarized from banks' financial statements 76

77 2.4 Operations of commercial bank system in Vietnam Performance evaluation of some typical banks Profit ratio, Source: VIRAC 77

78 2.4 Operations of commercial bank system in Vietnam Performance evaluation of some typical banks Bad debt ratio, Source: VIRAC 78

79 2.4 Operations of commercial bank system in Vietnam Performance evaluation of some typical banks Provision ratio for risks, Source: VIRAC 79

80 2.4 Operations of commercial bank system in Vietnam Performance evaluation of some typical banks NIM coefficient, Unit: % Source: VIRAC 80

81 2.4 Operations of commercial bank system in Vietnam Performance evaluation of some typical banks Debt coefficient, Source: VIRAC 81

82 2.4 Operations of commercial bank system in Vietnam Performance evaluation of some typical banks Self-financing ratio, Source: VIRAC 82

83 2.4 Operations of commercial bank system in Vietnam Outlook and forecast For credit to the economy For liquidity of the banking system For interest rate 83

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