DNVN - Mr. Nguyen Quang Thuan, Chairman and CEO of FiinRatings, commented that the Vietnamese economy still heavily relies on bank credit, with a target of 16% credit growth. The need for infrastructure development and the recovery of the real estate market make the role of the capital market even more important.
Speaking at the seminar "Vietnam Credit Focus 2025: Growth, Credit and Capital Markets in the New Era" on February 27th, Mr. Nguyen Quang Thuan - Chairman and CEO of FiinRatings - stated that Vietnam aims for 8% growth this year and strives for double-digit growth in the following years. This is a significant challenge.
"From a credit rating perspective, we hope that Vietnam's position will be further enhanced, but it is crucial to ensure sustainable and safe growth. Currently, the economy still relies heavily on bank credit, with a target of 16% credit growth," Mr. Thuan said.
According to Mr. Thuan, the bond market has shown signs of a fairly good recovery, but non-bank corporate bonds, especially those crucial for raising capital for production and business, remain limited. Facing new challenges, particularly the need for infrastructure development and the recovery of the real estate market, the role of the capital market is becoming more important than ever.
A key issue for Vietnam currently is the goal of improving its national credit rating. Vietnam's public debt is currently over $150 billion. An improved national credit rating would enable Vietnam to raise capital at a lower cost. Interest rates on foreign loans for domestic private enterprises are also based on this rating.
Thomas Jacobs, Country Director for Vietnam, Cambodia, and Laos at the International Finance Corporation (IFC), believes that by diversifying its financial instruments, Vietnam can mobilize new sources of capital and reduce its dependence on traditional lending markets. Expanding the capital market will create a more flexible and dynamic financial system, which is crucial for achieving Vietnam's climate and sustainable development goals.
Many speakers at the event emphasized that Vietnam's capital market is heavily reliant on the banking system. Meanwhile, the banking sector is also facing a number of challenges that are impacting its growth ambitions.
Ivan Tan, Director of Financial Institution Ratings at S&P Global Ratings, believes that compared to other countries in the region, Vietnam has relatively stable credit growth and a higher overall growth rate. Vietnamese banks also have stable profitability compared to other banks in the region. However, a challenge is that growth will be limited by capital buffers.
Therefore, the participation of foreign banks in owning shares in Vietnamese banks is necessary. However, in most of Vietnam's leading banks today, the ownership percentage of foreign investors has already reached its maximum.
Furthermore, many foreign shareholders are dissatisfied because Vietnamese banks have paid very few cash dividends in recent years, a significant difference compared to other countries. While dividend payments in shares are still being maintained, they do not essentially increase capital.
Given the above situation, Mr. Thuan predicted that the corporate bond market will have ample room for development, contributing to better growth of the capital market. However, greater efforts are needed to unlock the capital market, improve capital efficiency, and reduce borrowing costs.
“We need to create a foundation to attract and expand the investor base, establishing a strategic framework for risk-based capital allocation. At the same time, we need to expand the scope and impact of credit guarantee activities.”
"If the capital market is not reformed soon, Vietnam's economic growth target of 8% in 2025 and double-digit growth in the coming years will face challenges," Mr. Thuan said.
Ha Anh
Source: https://doanhnghiepvn.vn/kinh-te/tai-chinh-ngan-hang/nen-kinh-te-van-phu-thuoc-lon-vao-tin-dung-ngan-hang/20250227055544248
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