About 90 percent of financial institutions operating in Vietnam are expected to reap higher pre-tax profit in 2017, while they could control or reduce bad debts this year, a State Bank of Vietnam (SBV) survey has found.
Most of the respondents in the survey, conducted between February 25 and March 9, expected their bad debt to loan ratio in the second quarter and for the whole of 2017 would stay unchanged or below that in the first three months.
Based on SBV data, bad debts in Vietnamese banks, mostly incurred due to a slowdown in the country's real estate market in the early 2010s, have been cut to 2.46 percent of loans at the end of November, 2016, from 4.83 percent in December 2014, one year after it set up an institution to deal with toxic loans, the Vietnam Asset Management Corp.
The survey on business trends for the April-June period, conducted by SBV's Monetary Forecasting and Statistics Department, has targeted all Vietnamese banks and foreign bank branches in the country and has a response rate of nearly 90 percent.
Banks expected the annual credit growth to slow to 17.23 percent this year, from the expansion of 18.25 percent in 2016, while deposits in 2017 could grow 16.23 percent from last year, below the 16.76 percent expectation in the December 2016 survey, the SBV said.
Half of the lenders would keep their fees unchanged for the whole of 2017, while 20 percent of them said they planned slight decrease and another 30 percent said they expected a small rise.
Banks expressed confidence in the government's effort to improve business climate and three quarters of the surveyed institutions look forward to a better business situation in the second quarter, while eight in 10 of those believe they can achieve better results in the whole year.