The State Bank of Vietnam (SBV) has updated the basic indicators of the credit institution (CI) system in the first four months of 2019.
Accordingly, by the end of April 2019, the total assets of the system reached 11,210 trillion dong, up by 1.36 percent (equivalent to 150.439 trillion dong) compared to the beginning of the year.
In particular, the total assets of seven state-owned banks increased by 1.37 percent to nearly 4,930 trillion dong. That of the group of private joint stock banks rose up by 1.64 percent to nearly 4,630 trillion dong. The group of joint venture and foreign banks recorded a decline of 1.03 percent in total assets, reaching 1,120 trillion dong.
The equity of the CI system developed by 5.66%, equivalent to an increase of over 45.6 trillion dong, reaching 851.795 trillion dong. Meanwhile, the group of finance and financial leasing companies saw the strongest equity growth of 11.52 percent to 36.315 trillion dong, followed by joint venture and foreign banks with 8.7 percent (reaching 177.037 trillion dong).
By the end of April 2019, the equity of the groups of state-owned banks and private joint stock banks was respectively 282.199 trillion dong and 352.305 trillion dong.
The charter capital growth of domestic banks remained slow. That of state-owned banks rose up by 0.75 percent to 149.001 trillion dong in the first four months of the year, while the charter capital increase of private joint stock banks in the period was 2.76%, reaching 116.619 trillion dong.
Thus, while the total assets of the group of joint venture and foreign banks were only more than a quarter of state-owned banks’, the charter capital of this group has nearly caught up.
The minimum Capital Adequacy Ratio of the system by the end of April was 12.19%, slightly improved compared to the 12.14 percent recorded in the beginning of the year. In particular, the CAR of state-owned banks was the lowest, only reaching 9.61%. According to leaders of banks such as Commercial Joint Stock Bank for Industry and Trade of Vietnam (VietinBank) and Commercial Joint Stock Bank for Investment and Development of Vietnam (BIDV), if applying the Basel II standards, the actual CAR may be even lower at just around eight percent.
From the beginning of the year until now, state-owned banks, the SBV, the Vietnam Banking Association, etc. have repeatedly petitioned the government to allow state-owned banks to retain their profit to increase charter capital.
According to the Vietnam Banking Association, if four banks including Commercial Joint Stock Bank for Agriculture and Rural of Vietnam (Agribank), Commercial Joint Stock Bank for Foreign Trade of Vietnam (Vietcombank), VietinBank and BIDV do not quickly increase their capital, the operational safety may be affected. The fact that these banks are slow to increase their charter capital may also influence their ability to supply capital, which could thereby affect the economic growth and reduce tax revenue.
