Total assets of CIs reach 12,930 trillion dong

21-Oct-2020 Intellasia | Dau tu Chung khoan | 6:02 AM Print This Post

The State Bank of Vietnam (SBV) said that thanks to the drastic and synchronous implementation of measures, the restructuring the system of credit institutions (CIs) and handing bad debts under the Scheme on restructuring CIs associated with bad debt settlement in the period of 2016 2020 (Scheme 1058) has achieved many positive results.

Specifically, the scale of the CI system continues to increase. By the end of August 2020, the total assets reached 12,930 trillion dong, up by 52.1 percent compared to late 2016. The financial capacity of CIs has been strengthened, and charter capital has increased gradually over the years. by the end of August 2020, the charter capital of the entire system was 629.1 trillion dong, up by 28.8 percent compared to late 2016, while the equity of the system was 1.007,7 trillion dong, up by 69.4 percent compared to late 2016.

It is known that that commercial banks with more than 50 percent of their charter capital (State-owned banks, not including the three banks which were compulsorily acquired by the State) continue to play important roles in the system, actively participate in supporting and handling weak CIs.

The SBV has closely supervised the implementation of solutions on restructuring state-owned banks, promptly requested banks to review and adjust the plans in accordance with operational practice to overcome shortcomings.

As of late August 2020, the charter capital of four state-owned banks (Commercial Joint Stock Bank for Agriculture and Rural Development of Vietnam (Agribank), Commercial Joint Stock Bank for Foreign Trade of Vietnam (Vietcombank), Commercial Joint Stock Bank for Industry and Trade of Vietnam (VietinBank), and Commercial Joint Stock Bank for Investment and Development of Vietnam (BIDV) was 145.2 trillion dong, accounting for 23.1 percent of the entire system, up by 6.3 percent compared to late 2016. Their total assets were 5.334,4 trillion dong, accounting for 41.3 percent of the entire system, up by 40.2 percent compared to late 2016.

Private joint stock banks have all focused on comprehensively consolidating and rectifying the financial aspects, administration, bad debt settlement, promoting measures to improve credit quality, business efficiency and competitiveness.

By the end of August 2020, the charter capital of private joint stock banks reached 290.1 trillion dong, accounting for 46.1 percent of the entire system, up by 44.4 percent compared to the end of 2016. The total assets of this bank group were 5.467,7 trillion dong, accounting for 42.3 percent of the entire system, up by 59.7 percent compared to the end of 2016.

As of late July 2020, the total capital source of the system of People’s credit funds in provinces and cities was 138.1 trillion dong, up by 9.2 percent compared to 2019. In which, the total capital mobilised from residents and economic organisations reached 121.2 trillion dong, up by 13.7 percent compared to 2019. The charter capital of these units was five trillion dong, up by 6.9 percent compared to 2019, while the total outstanding credit was 99.6 trillion dong, down by 0.7 percent compared to 2019, including 73.1 trillion dong of short-term loans and 26.5 trillion dong of medium and long-term loans. The business results (difference between accumulated revenue and expenditure) of the whole system was 904 billion dong.

For microfinance area, the whole system currently has four microfinance organisations (Tinh Thuong, M7, Thanh Hoa, and CEP) with three headquarters in Hanoi, HCM City and Thanh Hoa. Their network is in 62 branches and 23 provinces and cities nationwide. The activities of microfinance organisations in recent years have had certain effects in supporting and improving the lives of people, contributing to hunger eradication, poverty reduction and black credit restriction.

The SBV has continued to improve regulations on microfinance organisations (issued Circular 19/2019/TT-NHNN dated November 5th 2019 on the network microfinance organisations; reviewed, evaluated two years of implementing Decision 20/2017/QD-TTg of the prime minister on the activities of micro-organisational programmes of political, socio-political and non-governmental organisations to study, amend, supplement and ensure practical relevance), in order to further improve the effectiveness of the state management and facilitate the effectiveness and healthiness of microfinance programmes and projects.

In addition, most CIs have applied the capital adequacy ratio (CAR) according to Circular 41/2016/TT-NHNN. In particular, by the end of 2019, 18 CIs have been approved by the SBV to apply the CAR under Circular 41 before the deadline, the target of having 12 to 15 CIs meeting Basel II standards on capital safety in 2020 has been achieved. Some CIs have requested to apply CAR according to Circular 22/2019/TT-NHNN.

It is known that Circular 22/2019/TT-NHNN dated November 15th 2019 was issued with the aim to create a legal basis for CIs which are facing financial difficulties, restructuring asset portfolio and have not met the capital safety ratios according to Circular 41/2016/TT-NHNN to build appropriate roadmaps from January 1st 2020 (but not exceeding three years) to comply with Circular 41/2016/NHNN.

 

Category: Finance, Vietnam

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