Assets of seven State-owned banks rose 8.69 percent to nearly VND 4.2 quadrillion, accounting for 45.4 percent of the total number. State-owned banks where the State holds the majority stake include Agribank, Vietcombank, Vietinbank, Bank for Investment and Development of Vietnam (BIDV), Vietnam Construction Bank, GPBank and Ocean Bank.
Meanwhile, assets of joint-stock commercial banks stood at more than VND 3.72 quadrillion, up 8.75 percent.
Total assets of finance and financial leasing companies were a little more than VND 134 trillion ending August, but this group witnessed the strongest asset growth of more than 17.2 percent.
Only Co-operative Bank of Vietnam saw its assets fall by 1.36 percent.
Ending August, total charter capital of the whole banking sector hit VND 505.3 trillion, up 3.45 percent compared to the start of the year.
Finance and financial leasing firms, and joint-venture and foreign banks had the strongest capital expansion of 8.3 percent and 7.7 percent, respectively.
Joint-stock commercial banks raised charter capital by 2.9 percent during the period, reaching more than VND 206.6 trillion, while the State-owned banks’ capital increased by just 0.8 percent, valued at VND 147.7 trillion.
Equity capital of joint stock commercial banks (VND 267.7 trillion) was also higher than that of State-owned banks (VND 246.2 trillion).
Ending August, the average capital adequacy ratio (CAR) of the whole system was 12.37 percent, much higher than the 9 percent rate allowed by the central bank.
However, CAR of the State-owned bank group remained below 10 percent, standing at 9.69 percent, while the similar number of the joint-stock commercial banks was 11.12 percent.
Joint-venture and foreign banks have the highest CAR of more than 32 percent, followed by finance and financial leasing companies of 18.3 percent.
CAR is expressed as a percentage of the bank’s capital to its risk-weighted assets and is one of the main metrics used to promote the stability and efficiency of financial systems.
However, bank experts warn that when BASEL II norms are applied, bank CAR may decline by 2-3 percentage points due to an increase in the amount of their risky assets. BASEL II also requires banks to maintain CAR of at least 8 percent.
Following the SBV’s road-map, about 12-15 Vietnamese banks must apply BASEL II by 2020, but 10 banks, including three State-owned banks (Vietcombank, Vietinbank and BIDV), participated in an earlier pilot program that started in September.
Moody’s Investors Service on October 31 upgraded its outlook for Vietnam’s banking system to positive for the next 12-18 months from stable, reflecting the country’s strong economic prospects and the positive outlook for most rated banks.
Source: VNA