Better performance forecast for banks in H2

Under the business sentiment survey covering domestic and foreign banks in Vietnam released last week, banks also expect better results for the whole of 2016.

A total of 86.5% of the respondents expected better results in 2016 than last year, of which 29% anticipated ‘significant improvement’.  

Compared with the previous survey conducted in the first quarter, banks were also more optimistic about credit growth this year.  

Banks forecast that the banking system’s credit growth would increase to 20.42% this year, roughly 3% higher than the Government’s target, thanks to stronger credit demand and better business conditions. In the survey in January, credit growth was expected at 20.1%.

The country has targeted credit growth of 18% this year, up from 17.26% in 2015, following growth last year that was its strongest since 2007 thanks to the economic growth.

The respondents also anticipated capital mobilisation of the entire banking system this year would reach 17.57%, of which the rising rate for deposits in the dong is raised to 19.1% from 18.4% in the previous survey but deposits in the US dollar is lower to minus 0.09% from previous 6.96%.       

The central bank has gradually cut or scrapped ceiling rates on dollar deposits to combat dollar hoarding and even abolished some dollar lending, but it recently resumed short-term loans in foreign currencies to support economic growth.

Liquidity in both đồng and dollar is also expected to be good in the second half of the year.

With optimism about the economic growth prospect and the exciting return of the finance and banking system in 2016, banks also anticipated the industry’s labour market would see positive changes next months.

According to the survey, it is expected that 42.4% of the respondents would increase their recruitment in the third quarter while 57% of them is expected more recruitment in the whole year of 2016.

In the second quarter, 28.2% of the respondents reported that they had more employment.