DNVN - Mr. Nguyen Quang Thuan - Chairman and CEO of FiinRatings commented that Vietnam's economy still depends heavily on bank credit, with a credit growth target of 16%. 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 workshop "Vietnam Credit Focus 2025: Growth, Credit and Capital Markets in the New Era" on February 27, Mr. Nguyen Quang Thuan - Chairman and CEO of FiinRatings, commented that Vietnam aims for 8% growth this year and aims for double digits in the following years. This is a big challenge.
"From a credit rating perspective, we hope that Vietnam's position will be increasingly enhanced, but the important thing is to ensure sustainable and safe growth. Currently, the economy still depends heavily on bank credit, with a credit growth target of 16%," said Mr. Thuan.
According to Mr. Thuan, the bond market has shown signs of recovery, but non-bank corporate bonds, especially important sources of capital mobilization for production and business, are still limited. Faced with new challenges, especially the need for infrastructure development and the recovery of the real estate market, the role of the capital market is more important than ever.
An important issue for Vietnam today is the goal of raising its national credit rating. Vietnam's public debt is currently around 150 billion USD. An improved national credit rating will help Vietnam raise capital at lower costs. Interest rates on foreign loans of domestic private enterprises are also based on this rating.
Mr. Thomas Jacobs – Country Director, Vietnam, Cambodia, Lao PDR of the International Finance Corporation (IFC) said that by diversifying financial instruments, Vietnam can mobilize new sources of capital and reduce its dependence on traditional lending markets. Expanding capital markets will create a more flexible and dynamic financial system, which is important for achieving Vietnam's climate and sustainable development goals.
Many speakers at the event emphasized that Vietnam's capital market is heavily dependent on the banking system. Meanwhile, the banking industry is also facing a number of challenges, affecting growth ambitions.
Mr. Ivan Tan - Director of Financial Institution Ratings, S&P Global Ratings said that compared to other countries in the region, Vietnam has a fairly stable credit growth rate, and the growth level is also higher. Vietnamese banks also have the ability to generate stable profits compared to other banks in the region. However, an existing challenge is that growth will be limited by capital buffers.
Therefore, it is necessary for foreign banks to participate in the ownership of Vietnamese bank shares. Meanwhile, in good Vietnamese banks today, the ownership ratio of foreign investors has mostly reached the maximum level.
At the same time, many foreign shareholders are also dissatisfied because Vietnamese banks have paid few cash dividends in recent years, quite different from other countries. Paying dividends in shares is still being maintained but in essence does not increase capital.
Given the above situation, Mr. Thuan predicted that the corporate bond market will have much room to grow, helping the capital market develop better. However, greater efforts are needed to open up the capital market, improve capital efficiency and reduce borrowing costs.
“We need to create a foundation to attract and expand the investor base, establish a strategic framework for capital allocation based on risk levels. 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 target of 8% economic growth by 2025 and double-digit growth in the coming years will face challenges,” said Mr. Thuan.
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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