Hanoi: Due to challenging business conditions and high deposit interest rates earlier this year, many companies were quick to increase their deposit amounts to earn interest.

As of the end of 2023, Mobile World Investment Corporation (MWG) held 24.3 trillion VND (990.4 million USD) in cash and cash equivalents.

MWG increased its cash holdings amid difficulties faced by its retail chains, The Gioi Di Dong and Dien May Xanh, due to weak consumer demand and fierce competition. This strategy contributed to the company’s financial revenue reaching 2.16 trillion VND for the whole year of 2023, a 65% increase compared to 2022. After deducting financial costs of 1.55 trillion VND, MWG achieved a net profit of over 600 billion VND from this segment, which helped the company escape losses.

Petrovietnam Gas JSC (GAS) owned the largest cash amount on the stock market as of December 31, 2023, reaching 40.7 trillion VND (approximately 1.7 billion USD). This figure increased by over 6 trillion VND since the beginning of
the year and continued to rise by more than 700 billion VND compared to the end of the third quarter of 2023. With such a massive cash reserve, PV Gas earned 2 trillion VND in interest from deposits in the past year, a 67% increase compared to the previous year. This translates to a daily interest income of 5.5 billion VND from bank deposits. Meanwhile, the company’s interest expenses for the entire year amounted to only 340 billion VND.

Over the past year, Binh Son Refining and Petrochemical Company Limited (BSR) also recorded a significant increase of 52% in financial revenue compared to the same period, reaching 2.66 trillion VND. This was mainly due to nearly 1.6 trillion VND in interest from deposits and over 1.05 trillion VND in exchange rate differences. BSR held a cash balance of 38.12 trillion VND at the end of the year, an increase of approximately 13.1 trillion VND compared to the beginning of the year.

After divesting from PGBank, Vietnam National Petroleum Group (PLX) experienced a strong 60% i
ncrease in cash compared to the beginning of the year, reaching nearly 30 trillion VND. The company generated 2.74 trillion VND in financial revenue in 2023, a 27% increase compared to the same period. This included 1.17 trillion VND in interest from deposits and loans, a 35% increase. Conversely, interest expenses also rose sharply by 40% compared to the same period, reaching over 900 billion VND.

The Airports Corporation of Vietnam (ACV) reported a cash balance of nearly 28.8 trillion VND, a decrease of over 4 trillion VND compared to the beginning of the year. The company earned more than 1.6 trillion VND in deposit interest throughout 2023, the same as in 2022. The interest expense was only about 67 billion VND as ACV had minimal short-term borrowings (410 billion VND). The long-term debt of over 10 trillion VND mainly came from ODA sources with low-interest rates.

FPT Corporation (FPT) recorded a cash balance of 24.38 trillion VND at the end of 2023, an increase of nearly 4.9 trillion VND over the year
. Deposit interest income in 2023 amounted to over 1.64 trillion VND, a 22% increase compared to the previous year. The interest expense was 832 billion VND.

The Vietnam Dairy Products Joint Stock Company (Vinamilk or VNM) held over 23 trillion VND in cash. The company earned over 1.5 trillion VND in deposit interest in 2023, a 28% increase compared to 2022. Meanwhile, the interest expense amounted to only 354 billion VND.

The Viettel Global Investment Joint Stock Company (Viettel Global or VGI) also had over 23 trillion VND in cash, an increase of more than 6 trillion VND since the beginning of the year. The company earned over 1.2 trillion VND in deposit interest in 2023, a 38% increase compared to the same period. Conversely, interest paid on loans was only 375 billion VND.

Saigon Beer-Alcohol-Beverage Corporation (Sabeco or SAB) reported 22.8 trillion VND in cash, a 3% decrease compared to the beginning of the year. With a significant deposit amount, Sabeco earned nearly 1.4 trillion VND in deposit int
erest in 2023, a nearly 36% increase compared to 2022. The interest expense was only 50 billion VND as the total debt was only 700 billion VND./.

Source: Vietnam News Agency

Hanoi: Slower than expected credit growth and a large number of non-performing loans have resulted in conservative growth targets among commercial banks for 2024, said industry insiders and experts.

In 2023, the country’s largest commercial banks, including state-owned Agribank, Vietcombank, Vietinbank and BIDV, reported nearly 25 billion USD in profit. Despite the positive figure, banks were reported to have scaled back on their growth targets this year, citing cautious approaches and higher loss provisions setup compared to previous years.

Last year, VPBank and Techcombank dropped out of the top banks in terms of profit in USD, while state-owned banks dominated compared to the private group in profit rankings, thanks to a cautious trend in setting up credit loss provisions in previous years.

Vietcombank topped the chart with a consolidated pre-tax profit of over 41.2 trillion VND (1.68 billion USD), a 10% increase year-on-year, followed by BIDV with a consolidated pre-tax profit of 27.6 trillion VND, a 2
0% increase year-on-year.

However, industry insiders said the core operating income from credit for the two banks did not show substantial growth in the past year. For example, in 2023, Vietcombank’s net interest income, the main source of income, only increased slightly by 0.7% to 53.6 trillion VND despite the credit portfolio expanding 10.6% compared to the end of 2022.

As a result, a reduction in risk provision costs has been a factor that helped Vietcombank’s pre-tax profit continue to grow, despite a 2.2% decrease in net profit from business operations in 2023 compared to 2022. At BIDV, besides reducing risk provision costs, non-credit sources such as services, foreign exchange business, and securities trading investment have been driving forces behind higher profits compared to the previous year.

Meanwhile, VietinBank has been less affected by credit issues. By the end of last year, the total outstanding loans reached over 1.5 quadrillion VND, a 15% increase compared to the end of 2022. The bank said
positive credit growth from the beginning of the year and sustained, steady growth in non-interest income helped the bank achieve a profit of 25 trillion VND, a 20% increase year-on-year. Agribank also reported a profit of approximately 25 trillion VND, exceeding the yearly planned target by 5-6%.

Among the private banks, MB has been the leader of the pack with a pre-tax profit of 26.3 trillion, a 16% increase year-on-year with a credit growth rate of 28%, significantly higher than the industry average.

Other top performers included Techcombank and ACB despite minor setbacks that prevented them from reaching the 1 billion USD profit mark. For example, last year Techcombank reported a 10% decrease in profits due to a reduction in credit income while having to increase provisions significantly. The bank ended 2023 with a profit of 22.9 trillion VND.

Meanwhile, ACB reported a profit of 20 trillion VND for the first time, thanks to reduced operational costs, growth in credit revenue and profit from securities
trading investments.

Banks, however, remained cautious about growth targets as they entered 2024.

In the latest survey by the State Bank of Vietnam (SBV), banks said they expected a more favourable business situation for 2024. Pre-tax profits may recover more slowly than business conditions.

As a result, Vietcombank aims for a profit of nearly 2 billion USD this year, a 10% increase compared to 2023, with total assets by the end of the year expected to increase by more than 8%, credit growth to be over 12%, and bad debt below 1.5%.

BIDV has set out some key indicators, such as managing outstanding credit according to the credit limit assigned by the central bank, expecting a 14% increase while leaving profit targets open. Vietinbank has set key business targets for this year, including total assets increasing by 5-10%; credit growth of 14% and reducing bad debt ratio to below 1.8%.

Meanwhile, MB has set three objectives this year: achieving a profit target of 30 trillion VND, serving 30 million customers
and securing a place in the country’s top 3 banks in terms of service quality and efficiency./.

Source: Vietnam News Agency

HCM City: Experts from top real estate consulting companies in Vietnam have expressed optimism about development prospects of the real estate market, particularly regarding the office and industrial segments.

According to Savills Vietnam, despite numerous challenges, the interest of foreign investors in the Vietnamese market in general and real estate in particular continues to expand. Fitch Ratings recently upgraded the country’s long-term national credit rating from BB to BB , with a “stable” outlook. In 2024, Vietnam’s GDP growth rate is expected to reach 6-6.5%, thanks to stable foreign direct investment (FDI) and the Government’s efforts to address real estate challenges, increase public investment, and implement growth stimulation policies in a timely manner.

About 85% of the rapidly growing companies in Vietnam are committed to the environmental, social, and corporate governance (ESG) standard, creating an increase in demand for green-standard office space in the market. By 2026, Ho Chi Minh City is
expected to provide 300,000 more square meters of new Grade A office space, such as The Nexus project or VP Bank Saigon Tower. Moreover, over 80% of the future Grade A and Grade B office supply in the southern economic hub will meet green standards.

Meanwhile, between now and 2026, Hanoi will see 15 new projects offering over 389,770 square meters of working space, with Grade A offices expected to account for 86% of the future supply. Green space is projected to constitute 18% of the future office floor area in the capital.

In recent times, many legal regulations have been passed, such as the amended real estate business law, amended housing law, and amended land law.

The head of the Hanoi and Danang offices at Savills Vietnam, Matthew Powell, described the passage of these laws as a positive signal for investment in the real estate market this year, boosting investor confidence.

Managing Director at Knight Frank Vietnam Alex Crane also called the amended land law a step forward for the market in the long
term that contributes to the improvement of related legal regulations.

Highlighting the bright future prospects of the industrial real estate, Crane noted that the supply of ready-built factory space for lease has tripled since 2016./.

Source: Vietnam News Agency

HCM City: MoMo has solidified its position as the most popular e-wallet in Vietnam for two consecutive years, according the Fintech Industry Rankings 2023 announced by Viettel’s information monitoring and analysis system on the network environment (Reputa).

Following its impressive performance in 2022, MoMo continued to take the lead in the rankings with a total score of 138.23, or 2.5 times higher than VTCPay, which came second in the list.

Although MoMo’s total score showed a slight drop compared to 2022, but the brand has become more popular among Vietnamese consumers seeking convenient and secure digital transactions.

Nguyen Ba Diep, co-founder of MoMo, attributed the success to the continuous efforts made by the company to improve its user interface and expand and enhance the features and utilities of its super app platform.

Alongside its commitment to cashless payments, MoMo has been at the forefront of providing investment, accumulation, and savings services, catering to the personal financial need
s of the Vietnamese population, he said.

Following MoMo were VTC Pay, VNPay, ZaloPay and Viettel Money. Meanwhile, the five most popular e-banks were Vietcombank, Timo, MB, Techcombank, and Vietinbank.

Moreover, as Vietnam embraces the digital revolution, a fascinating trend has emerged with the rapid rise of QR-code based payments, e-wallets, and digital banking applications, igniting a cashless revolution across the nation.

Numerous users have voiced their preference for e-wallet payments, citing the alluring discounts and vouchers they receive as key factors./.

Source: Vietnam News Agency

Hanoi: House buyers in the capital can pin hopes on new supply coming from infrastructure development this year, which is expected to push up demand for housing in neighbouring localities with reasonable prices and larger land reserves.

Savills Vietnam has considered this a positive factor on the supply side. Infrastructure development projects to build the belt roads No. 3, 4, 5, for instance, will expand the capital’s housing market and demand will no longer concentrate on the downtown areas.

Savills’ survey shows that in 2024, the Hanoi market will offer about 12,100 more apartments, with as much as 87% of them located in Hoang Mai, Nam Tu Liem, and Ha Dong districts. Additionally, neighbouring provinces like Hung Yen and Bac Ninh are to host approximately 203,000 more apartments between 2024 and 2026.

Do Thu Hang, Senior Director at Savills Hanoi’s research and consulting department, underscored the possible impact brought about by the recently amended real estate business law, amended housing law, and
amended land law.

With developers required to complete financial obligations before building their future products, confidence is higher in future buyers, Hang said.

However, facing the market are challenges stemming from limited supply and imbalance between supply and demand, especially in affordable housing. In the fourth quarter of 2023, Hanoi saw the lowest number of new supply in a decade, regarding both low-rise and apartment segments.

According to Hang, given the restricted supply and high prices in the primary market, opportunities for homebuyers may lie in the secondary market, which offers affordability, a wider range of choices, and better legal assurances./.

Source: Vietnam News Agency

Hanoi: Governor of the State Bank of Vietnam (SBV) Nguyen Thi Hong on February 20 said propelling credit growth is the key task in 2024 to ensure ample capital for the economy.

In an online conference of the banking sector, the official also highlighted the imperative of reducing operational costs among the credit institutions, and urged for a reduction in interest rates for loans to citizens and businesses. This directive was accompanied by a call for a balanced management of deposit and loan sources to effectively mitigate credit and liquidity risks.

According to the Governor, the central bank has steadfastly followed the Government and Prime Minister’s directives on prioritising support for growth coupled with macro-economic stability and inflation control since the beginning of this year.

Aligned with the targeted economic growth of around 6-6.5% and inflation of about 4-4.5% set by the National Assembly and the Government, the SBV aims for a credit growth of around 15% this year, subject to adjustment
s.

As of January 31, deposit and lending rates continued to show a downward trend, indicating a trend in line with the bank’s objectives.

Director General of the SBV’s Department of Credit for Economic Sectors Ha Thu Giang said the central bank will direct credit institutions to promote safe and efficient credit growth. This includes channeling credit into priority sectors and growth engines while keeping rigorous control over credit in potentially risky areas.

She also pledged efforts to streamline loan procedures and create favourable conditions for firms and residents to access capital in support of production and daily lives, thereby contributing to curbing loan shark practices./.

Source: Vietnam News Agency