Credit Growth of Foreign Banks in Vietnam +26% in Jan-Oct
Foreign credit institutions in Vietnam had lent VND230.117 trillion ($11.8 billion) by the end of October, rising 26% from end-2009 and representing a 10.77% share of local credit market.
Bad debt ratio of foreign banks was curbed at below 1.5%, the State Bank of Vietnam, the country’s central bank, said on its website. The ratio was only 0.4% at five 100% foreign-invested banks in the country.
Total deposits of local foreign credit institutions soared 33.9% from end-2009 to VND363.855 trillion at end-Sept while their total assets were up 30.8% to VND420.53 trillion or 11.25% of those of banks in Vietnam.
Sixty four percent of the total assets, or VND273.086 trillion, was held by local branches of foreign banks, up 31% from end-2009. Non-banking credit institutions held modest ratio of 2%, but they posted a strong asset growth of 90%.
Up to now, 71 foreign credit institutions and 48 representative officials of foreign banks have made presence in Vietnam and are considered an important channel to facilitate the Southeast Asian country to attract more foreign direct investment.
Vietnam, which joined the World Trade Organization (WTO) in 2007, will fully open its banking market to foreign players next year. Foreign banks will thus be allowed to operate all banking businesses, as did by Vietnamese banks, from Jan 1 of 2011.
SBV Governor Nguyen Van Giau earlier said that the country’s credit growth is estimated to expand between 25% and 27% this year, down from as high as 37% last year. (SBV)
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