BIDV, ADB release report on Vietnam’s financial market | Business
Illustrative photo (Source: VNA)Hanoi (VNA) – The Bank for Investment and
Development of Vietnam (BIDV) and the Asian Development Bank (ADB) on May 25
co-organised a workshop to announce a report on Vietnam’s financial market in
2021 and its 2022 outlook.
BIDV Senior Executive Vice President Tran Phuong said it is
a result of research by a team of ADB and BIDV experts.
This is the first time a Vietnamese financial institution
has collaborated with ADB to make a comprehensive assessment report on the
Vietnamese financial market, covering the fields of banking, securities, and
insurance, he noted.
Looking back at 2021, the report states that the world
economy recovered quite quickly along with a rapid increase in inflation due to
the majority of countries reopening socio-economic activities. The global
financial market continued its fast recovery given the new normal condition and
strengthened confidence.
In that context, Vietnam’s economy recovered quite quickly
thanks to an appropriate change in epidemic prevention strategy, which allowed
reopening from the beginning of the fourth quarter of 2021. As a result, growth
in the quarter reached 5.22 percent, compared to minus 6.02 percent in the third
quarter, helping the economy expand 2.58 percent for the entire year. Meanwhile,
inflation was kept at a low level of 1.84 percent last year. Vietnam’s
financial market maintained a positive growth momentum thanks to stable
macroeconomy and the implementation of fiscal and monetary policies in support
of people and businesses.
In the banking sector, combined pre-tax profit of 29 commercial banks that account for 80 percent of the market surged nearly 32 percent, while their operational costs reduced by 15 percent. At the same time, the banking sector continued with programmes on debt restructuring and supporting pandemic-affected customers with total value of 52 trillion VND in 2021 and 20-25 trillion VND in 2022.
However, the report points to emerging risks on the banking market such as rising potential bad debts, an increase in financial crimes, the downward adjustments on the stock market, or market manipulation.
Dr. Can Van Luc, Chief Economist of BIDV, said Vietnam’s economy is forecast to better recover this year to grow 5.5-6 percent. Such growth is also projected to come with high inflation rate at about 3.8-4.2 percent, he added.
Luc said the financial market will benefit from the recovery, with the banking industry’s profit expected to grow by 20-25 percent on an annual average and the insurance market sustaining its growth. The stock market, meanwhile, is forecast to make necessary adjustments to become more stable and healthier.
Recommendations made in the report focus on completing a legal framework and policies on handling bad debts and making the securities and bonds markets healthier, improving risk control in the financial system and accelerating the building of institutions and a legal corridor for the management and development of the digital economy, digital finance and digital banking./.
VNA
