CREDIT INSTITUTIONS’ FUTURE BRIGHT

A majority of credit institutions in the country expect an upward trend in their business in the remaining months of the year, after making improvements in the first half of 2018, according to a survey released last week by the State Bank of Vietnam.

According to the business sentiment survey, which covered domestic and foreign commercial banks operating in the country, 76.1 per cent of the respondents expected better results in the third quarter, while 82.6 per cent hoped their business performance throughout 2018 would improve further compared to last year. Of this, 20.7 per cent and 32.6 per cent anticipated “significant improvement” in Q3 and the entire year, respectively.

Eighty-eight per cent of the respondents predicted their pre-tax profit in 2018 would rise compared to last year, helping the average growth rate of the entire banking system to reach 19.05 per cent, higher than the 18.2 per cent forecast in the previous survey conducted in May.

The survey also showed that many banks expected customer demand for banking services, especially lending, in the second half of 2018 and the entire year to increase compared to last year.

Banks expected the banking system’s credit growth to reach 5.99 per cent in the third quarter and 16.7 per cent for the entire year.

The respondents also anticipated capital mobilisation of the entire banking system this year would reach 16.51 per cent, of which the increase in the third quarter was anticipated at 5.47 per cent.

Banks also said the liquidity of the banking system in both Vietnamese dong and foreign currencies was currently “good” and that the positive status would continue for the rest of the year.

With optimism about growth prospects for 2018, banks also forecast the industry’s labour market to see positive changes in the coming months.

Despite more recruitment in the first half of this year, many banks said they are still short of employees, with 62 per cent of the respondents saying that they planned to recruit more in the third quarter of this year.

For the entire year, 70 per cent of the respondents expect to hire more employees while 23 per cent said they would keep their workforce unchanged and 7 per cent plan to cut their workforce.

Source: VIR