Banks are reducing lending interest rates by 1-3% per year compared to 2022 to stimulate demand for home loans in the wake of the loan decline.

The State Bank of Vietnam (SBV) has signed a Memorandum of Understanding on regional payment connectivity with their counterparts of ASEAN5 countries, namely Indonesia, Malaysia, Philippines, Singapore, and Thailand.

There is significant room for the development of the domestic credit card market, as the number of holders of those cards remains modest, according to a representative from the State Bank of Vietnam (SBV).

Commercial banks made large profits from spot foreign exchange trading activities in the first half of this year as the difference between the dollar buying and selling price was often high at some VNĐ350-400 per dollar.

The banking sector in Vietnam is currently sitting on mountains of cash as the demand for loans in the economy remains woefully low, said Deputy Governor of the State Bank of Vietnam (SBV) Dao Minh Tu.

Banks make up a significant proportion in the overall and private enterprise categories, according to the PROFIT500 rankings released on September 8.

The Ministry of Industry and Trade (MoIT) has set a target to increase the cashless payment ratio in e-commerce, especially e-payments through payment intermediaries or applications, to 50% by 2025.

Visa's report points out that, besides digital banking, digital retail has also marked particularly strong growth.

Commercial banks in Vietnam have been actively offering loans for green projects and expanding green credit through mobilising capital from international credit institutions.

While a company going bankrupt can impact hundreds of employees, the losses incurred by a bank can potentially lead to a collapse in the entire banking system, said the central bank’s Deputy Governor Dao Minh Tu.

Commercial banks in Vietnam have invested a total of 15 trillion VND (629.7 million USD) in digital transformation, heard an online seminar on ensuring security and safety for e-payments in the digital era held on August 21.

Within a year, VPBank’s value increased by almost 1.5 times, reaching nearly US$1.3 billion and ranking 173rd in the world’s 500 most valuable banking brands.

Lending interest rates will drop sharply in the second half of 2023 as capital costs of commercial banks are falling, analysts forecast.

The proposed changes in the ownership ratio have raised concerns in the banking system, as they fear they may hamper economic growth.

Total non-performing loans (NPLs) at many banks surged in the first half of this year due to the poor business performance of the whole economy, and experts forecast the trend will continue.

Five banks in Vietnam recorded a pre-tax profit of more than 10 trillion VND (422 million USD) in the first six months of this year, financial statements of the banks showed.

Deposits at commercial banks have been increasing steadily, though interest rates are no longer attractive.

Prime Minister Pham Minh Chinh has ordered the State Bank of Vietnam (SBV) and the Ministry of Finance to report the findings of an investigation into bancassurance operations by the end of July.

Bad debt in Vietnam’s banking system soared in the first half of this year and is expected to rise further in the coming months.

Four State-run banks have further reduced interest rates for deposits of various tenors in a bid to make loans cheaper for businesses that are struggling to survive tough times.