Businesspeople have called on the government to take measures to control foreign capital and prevent foreign investors from acquiring local strong brands and Vietnamese enterprises in important business fields.

Businesses are expecting interest rates to continue to fall, while banks’ credit growth continues to stand still or declines because of low credit demand.

Within two months, the State Bank of Vietnam (SBV) slashed interest rates twice to support the economy.

2020 may become a ‘nightmare’ for many consumer finance companies, which could see their profits drop sharply because of new regulations and the effects of COVID-19.

Experts have warned that the epidemic would lead to increased risk in asset quality.

Most banks made fat profits in 2019 and some of them had profit of over tens of trillion of dong. But their profits mostly came from lending.

“We think that in 2020-2022, Vietnam may face negative impact from the trade war instead of short-term positive impact, ” said Tran Toan Thang from the Centre for Socio-Economic Information and Forecast (NCIF).

Banks’ nine-month financial reports show that bad debts have increased compared with the beginning of the year, though the bad debt ratio has fallen.

Real estate firms are seeking new sources of capital as commercial banks have tightened lending.

The credit growth rates of state-owned banks are decreasing, but rising at joint stock banks.

The warning about risks of funding BOT (build-operate-transfer) projects given two years ago is becoming a reality.

Outstanding loans to the real estate sector have been increasing steadily although Vietnam has been keeping tight control over lending.

Experts, citing figures and reports, affirmed that banks have not stopped funding real estate projects.

The gap among commercial banks is wideneing with top-tier banks leaving others far behind. However, they are not problem-free.

The central bank believes that the consumer finance market in Vietnam is still in an early development stage, and needs to be controlled strictly by risk management tools.

After reaping high profits and gaining growth of 30-40 percent in 2017-2018, Vietnam’s commercial banks have become cautious about their business plans for 2019.

After many years of high credit growth rates, the ratio of credit to GDP in Vietnam has nearly hit the average level of OECD countries. 

VietNamNet Bridge - FE Credit and HD Saison have reported lower growth rates as they have had to settle problems arising after a hot development period.

Many banks have had credit growth rates near the ceiling set by the State Bank (SBV), which has warned that it will not consider lifting the rate ceiling for any bank.

VietNamNet Bridge - Experts say the legal framework for consumer financing is still not open enough, creating difficulties in attracting foreign capital.