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Credit market share of private banks rise

Private banks have posted significant growth in credit market share in the past five years.

According to statistics from Viet Dragon Securities Company (VDSC), 26 listed banks by the end of 2020 increased their total credit market share to 71.3 per cent from 65.4 per cent at the end of 2015.

Of which, the group of private banks, whose credit market share is more than 2 per cent each, posted a 3.5 per cent growth in credit market share in the period, VDSC statistics showed.

In which, MBBank ranked first with an increase of 90 basis points, followed by Techcombank and VPBank with rises of 86 and 78 basis points, respectively.

The three banks also had compound annual credit growth of more than 20 per cent while their capital adequacy ratios also topped the list.

Sacombank was the only bank to lose credit market share with a reduction of 2 basis points.

VDSC’s statistics also showed banks made a strong shift to corporate bonds in 2020 so as to spur credit growth in the year when loan demand was affected adversely. The contribution rate of corporate bonds to banks’ credit growth in 2020 ranged from 20-38 per cent.

According to VDSC, Việt Nam’s economy has been heavily dependent on credit. Therefore, to maintain the country’s GDP growth rate of 6-8 per cent in the coming years as projected, VDSC estimated the credit growth of the banking industry to stay at double digits.

VDSC forecast credit growth of the banking industry this year would be 13.1 per cent on average. Major private banks, including Techcombank, MBBank, VPBank and ACB, are expected to maintain their credit growth higher than the industry’s average rate.

The State Bank of Việt Nam (SBV) targeted a credit growth rate of 12 per cent this year, equivalent to the growth of 12.13 per cent last year. However, it said the goal was not a fixed figure, as it might adjust it if necessary.

According to SBV Deputy Governor Đào Minh Tú, in case the COVID-19 pandemic is totally controlled, and the economy needs fast recovery, leading to increased credit demand, the SBV will expand credit to support businesses and economic recovery. Vice versa, if there are signs that the economy needs tighter control to curb inflation, the credit growth will be slashed.

The support for businesses during the post-pandemic period was defined as one of the major tasks of the banking sector in 2021, Tú noted. — VNS