Several banks swiftly lowered deposit interest rates last week, paving the way for reductions in lending rates in the near future to bolster businesses and fuel recovery.

Bank stocks will deliver a strong performance again this year, partly because sector-wide bank earnings growth is expected to accelerate from 14% in 2024 to 17% in 2025 driven by a shift in GDP growth drivers from external factors to domestic driven growth.

Digital transactions at many commercial banks have reached a rate of 97-98%, with the banking sector maintaining annual double-digit increases in both transaction volume and value, said Deputy Governor of the State Bank of Vietnam Pham Tien Dung at a recent workshop.

As of June 14, credit growth has reached 3.79% compared to the end of last year, marking a bright spot for the banking sector, according to the central bank.

Prime Minister Pham Minh Chinh has set three major digital transformation targets for the banking sector, including creating the most favourable conditions for people, businesses and agencies to access banking services.

Prime Minister Pham Minh Chinh on January 8 asked the banking sector to maintain its role as the “blood of life” for the national economy, while addressing a conference in Hanoi on January 8.

Allowing banks access to Vietnam’s population database has set the foundation for the banking sector to expand and provide digital services to more customers, as well as improve security, prevent fraud and identity theft, according to the State Bank of Vietnam's (SBV) Deputy Governor Pham Tien Dung.

Prime Minister Pham Minh Chinh on July 15 ordered prioritising capital for production and trade to fuel growth in tandem with stabilising macro-economy, controlling inflation and Government and public debts while ensuring major balances of the economy.

The prevalence of cross-shareholding in the banking sector has caused concerns among experts as they believe the situation could render banks' financial valuations inaccurate.

The banking sector should take more drastic measures to restructure credit institutions in association with the settlement of bad debts to contribute to curbing inflation and stabilising macro-economic factors, according to insiders.