Vietnam - Foreign Influence, Privatization Leading Bank Loans To Growth

Bank loans in Vietnam are projected to grow at a CAGR of 15.22% by 2011 due to increasing privatization and allowance of foreign ownership, says RNCOS report.

A new market research report, ?Booming Financial Sector in Vietnam (2007-2011)?, by RNCOS forecasted that the total Vietnamese bank loans will grow at a CAGR of 15.22% from 2007 to 2011, thanks to the increasing confidence in banking sector, and growing privatization and foreign participation.

According to the report, in future, demand for bank loans is likely to increase due to emerging private sector, though insufficient supply of financial services doesn?t seems to fulfill this demand. Moreover, most of the bank loans are directed towards State-Owned Enterprises (SOEs) as about 70% of banking assets are covered by four largest SOCBs (State-Owned Corporate Banks) with implicit and explicit government support for State-owned Enterprises (SOEs). But the scenario of financial services is expected to improve during 2007-2011 due to government efforts to increase access to bank finance, especially for small- and medium-sized private enterprises, and to adopt new lending policy in place of its conventional practice of directed policy lending.

The Vietnamese government is also making State-Owned Banks (SOBs) partially privatized, which allows them to sell their shares in the market and increase their funds instead of depending upon the state funds. The government is also allowing upto 15% foreign ownership in equitized commercial banks. The first phase of this process mandates the banks to hike their CAR to the international standard of 8% through government bond issues, money raised by banks themselves through issues and bonds, and funds from the World Bank.

?Booming Financial Sector in Vietnam (2007-2011)? provides updated analysis on the thriving Vietnamese financial sector and various products and services provided by it. The report provides detailed overview on various opportunities critical to the success of banking and insurance industry of the country. Moreover, rational forecast on bank assets, deposits, loans, insurance premium and payment cards helps the global banking players, investors and financial service providers in planning their business strategies.

About RNCOS:
RNCOS, incorporated in the year 2002, is an industry research firm. It has a team of industry experts who analyze data collected from credible sources. They provide industry insights and analysis that helps corporations to take timely and accurate business decision in today's globally competitive environment.

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by Shushmul Maheshwari (few years ago!)

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