The State Bank of Vietnam (SBV) recently published a survey on the sentiment of banks and credit institutions in Q4 2022, and the result showed nearly 90% of the banks in the country expect profit before the year ends. The data were collected August 25 to September 10.
SBV’s survey noted: “Fierce competition within the sector is seen as a key factor that may impact the business performance of banks in 2022.”
As the primary supplier of credit, the banking sector provides money for people to buy properties and cars and for businesses to meet their payrolls, expand their operations, and purchase equipment. This means that when the banks gain, so do the economy and its people.
Besides having cash access, financial institutions help drive e-commerce as it goes digital. Not to mention the sector is a major employer.
According to the SBV report, 70.4-75.9% of banks expected improved business performance throughout the year. While 31.6% of respondents said, they increased their interest rates slightly without changing the service rates in Q3.
In addition, 61% of the banks anticipated that the average interest rate would go up by 0.37% in Q4, and only 7-9% suggested a slight decrease in the rate.
Moreover, of the surveyed banks, 8-10% said they anticipate a decrease, while 66-60% of banks suggested an increase in interest rates of between 0.56 and 0.57% in 2022. The data suggest there will be an increase in both lending rates and bank service fees as the year ends.
However, they expect the deposit rate to increase by an average of 4.3% in Q4 and 10.2% in 2022, a decrease of 1.3% compared to the previous data.
As for credit demand in the economy, the banks said they’ve seen a substantial increase since the Q4 of 2021 and would remain high in the remainder of the year, in which demand from the business side would be higher than that of individual customers.
The State Bank of Vietnam is the central bank of Vietnam. It currently owns about 65% stake in VietinBank - the country's largest listed bank by capital.
Don’t withdraw your money
A ‘warning’ to empty their SCB (Saigon Joint Stock Commercial Bank) account is making rounds on social media.
Posts cite the notice came after the death of the bank’s CEO as well as the publicized arrest of a Vietnamese real estate tycoon on suspicion of financial fraud.
“They are facing a crisis,” said one SCB user. “When the issue blew up on Saturday, I attempted to send all my money from my SCB account to a different bank but no luck.”
Another social media user said the arrest issue didn’t start the crisis but the mass money withdrawal. “Mass money withdrawal from the SCB created crisis for the bank and chain effect to the whole banking system and that is purely because no bank can prepare that much cash at such short notice to return to everyone.”
Users who are familiar with how banks work suggested they are free to withdraw their money anytime, but they have to consider delays since SCB system is overloaded with requests now.
The SBV recently released an assurance that the banking sector’s in a stable condition and they’re closely monitoring the operations at SCB.
Dao Minh Tu, SBV Vice Governor, said, “We urge people not to withdraw money, as premature withdrawal would affect their rights.” According to the Vice Governor, the central bank would ensure the stable operation of SCB as well as the deposits in the bank.
Additionally, the State Securities Commission of Vietnam (SSC) also released a statement confirming SBV’s assessment that the market is in stable condition. “The Government, the Ministry of Finance, and other agencies stand ready to support the market’s healthy and sustainable development,” the statement reads.
The Commission also appealed to the investors to not rush anything and remain calm and assess both risks and opportunities before changing the course of the market.