Analysts from the Viet Dragon Securities Company (VDSC) say despite the dip compared to 2018, results are still positive. In a banking industry report released recently, analysts attributed the slowdown to reduction in income from interest of loans and net profit margin (NIM) ratio. Bank profits are forecast to slow this year due to reduction in income from interest of loans and net profit margin (NIM) ratio. (Photo for illustration: dautucophieu.net) According to the report, the NIM ratio will decline due to the pressure for banks to raise medium and long-term capital to meet a State Bank of Vietnam’s strict regulations. Those regulations have seen a reduction in the ratio of short-term capital used for medium- and long-term loans from 45 percent to 40 percent from early 2019 and raising the capital adequacy ratio to prepare for applying international banking standards Basel II from early 2020. The NIM reduction was also forecast as the proportion of retail outstanding loans at banks is high and competition in retail lending increasing. Another factor is that banks’ provision expenses for risky loans continue to be high, especially in banks, such as BIDV, Vietinbank, VPBank, TPBank and HDBank, whose non-performing loans are still kept… Read full this story
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