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Foreign banks hold 11.25% market share
Foreign banks continue to affirm their important position in Viet Nam. They now hold assets valued at over VND420 trillion (US$20 billion), or 11.25 per cent of the entire finance sector, according to State Bank governor Nguyen Van Giau.
He released the figures at a meeting with representatives from foreign banks late last week.
According to the data, total capital mobilisation reached nearly VND364 trillion ($17.3 billion), an increase of 33.8 per cent. Total outstanding loans stood at over VND230 trillion ($10.9 billion), marking an increase of 26 per cent against 2009 and accounting for a 10.77 per cent share of the banking system's credit market.
By October 31, Viet Nam had 71 foreign credit institutions and 48 representative offices operating in the country.
After operating for one year, five foreign banks have 14 branches nationwide while the number of joint venture banks remains unchanged at 30.
Most of these institutions are investing in the production and service industries. Real estate loans and securities account for only a low proportion of trade.
The majority of foreign credit institutions have carefully implemented credit policies that help minimise bad debt. They maintain levels below 1.5 per cent of total outstanding loans.
The bad debt of wholly-foreign invested banks reached only 0.4 per cent. However, the ratio of bad debt from foreign banks still increased to 60 per cent, or VND2.7 trillion ($128 million).
According to Governor Giau, the global economy is predicted to bounce back further next year and strong growth rates are expected, although not guaranteed.
Next year, the State Bank of Viet Nam would monitor carefully monetary and financial policy to curb inflation and stabilise the country's economy, he added.
The banking system would begin the new year by implementing State Law and a new law on credit. This would be an important milestone in bringing the banking system in line with the market economy, Giau said.
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