Mirae Asset – Vietnam Banking Sector, 2024

The State Bank of Vietnam reported steady credit growth of approximately 9% year-to-date by the end of the third quarter of 2024, with a quarterly increase of 3 percentage points. The SBV Governor expressed confidence in meeting the 15% target for the year, with lending rates remaining stable overall and only a few banks raising rates. A potential late-year boost could push credit growth to the target level, though experts suggest a more moderate growth rate around 13.5-14% for 2024. Corporate lending drove overall credit growth, particularly in manufacturing and real estate sectors, with a slight recovery in retail lending. Competition among banks remains intense, with projections of a slight increase in rates in the near future. Despite a decline in corporate bond exposure, banks are facing challenges such as asset quality issues and limited cash flow from real estate sales, prompting a shift towards more oversight over disbursements and conversions of bonds into loans.