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Financial services sector poised for rapid growth, say analysts
Vietnam’s financial services markets are expanding rapidly, but retail and small-and medium-sized enterprise (SMEs) market penetration is still relatively low, according to a report from PricewaterhouseCoopers (PwC).
The report, titled Poised for Rapid Growth: Entering the Vietnamese Financial Services Sector, was delivered at the Global Tax Symposium organised by PwC in Ho Chi Minh City on May 22.
Even though Vietnam is still a largely cash-based society, use of banking services is growing rapidly.
The banking sector has been expanding at around 20 percent per year since the beginning of the decade and has now reached 80 billion USD in total assets.
The report says the revenues of the top 10 banks increased by an average of more than 50 percent and their profits by an average of 195 percent in 2006, as demand soared, efficiency improved and costs decreased.
The potential for further expansion as the economy develops and incomes increase is evident from the fact that only around 5 million people have bank accounts and even fewer have credit cards.
A key development in the credit market in recent years has been unsecured lending.
In addition to consumer lending, another potential growth area has been SME credit, a sector that up to now has been largely funded by private savings.
The expansion of the credit market and the offering of unsecured loans are placing tougher demands on risk management.
The ability to rate credit worthiness is likely to be an important competitive factor for lenders, who will need to take account of both qualitative as well as quantitative factors, and may encourage some to seek the expertise of foreign partners.
Some 230 PwC clients, partners, global and regional PwC leaders are attending the two-day symposium, held in Vietnam for the first time.
With this year’s theme, Implementing Tax Strategies in Asia -What is Possible?, the symposium focuses on the practical aspects of managing taxes and building effective tax strategies for companies in Asia.
VNA
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