250717Intellasia Finance Vietnam The outstanding loans of Vietnam consumer finance soared from $7.3

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Transcript of 250717Intellasia Finance Vietnam The outstanding loans of Vietnam consumer finance soared from $7.3

  • 25 July 2017

    finance & business news

    FINANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Reference exchange rate stays flat 1 Central bank firm on bad-debt resolution 2 Consumer credit grows rapidly as retailers thrive 2 Prime minister approves scheme on banking sector restructuring 3 Banks go slow on stock listing 4 More cooperation opportunities between foreign and local

    investment banks 6 Vietnamese Fintechs targeting at $35b pie 7 GoBear to launch unsecured loan awareness page 8 Sacombank achieves $19 million pre-tax profit in H1 9 IMF: Vietnam's dynamic economy continues to do well 10 Government targets 6.4-6.8pct growth in 2018 10 DOC ends anti-dumping investigation against VN polyester fibre 11 Amended decision on anti-dumping measures against

    imported steel 12 Ministry seeks support for car industry 12 Selling price of social housing may rise 12 Green tax hike on petrol 13 HN: 179 electricity grid works operated in H1 14 Firms fret over wage hike, social insurance 14 Transport ministry reconsiders ride-sharing service ban 15 State's red tape-cutting yields business growth 16 US property purchases on shaky legal grounds 17 M&A market poised for a turnaround 18 Influx of local travellers feeds vital hotel market 21 Foreign investors pouring more money into petrol market 22 Sweets industry still pulling in investors 23 Experts concern about increasing cash inflows into real estate 23 Japanese investors keen on real estate 24 Vietnam, RoK enjoy thriving trade 25 Vietnam, Laos work closely to promote trade 25 HCM City: retail sales, services revenue up 10.2pct in H1 26 Ha Giang seeks to woo tourism investors 26

    BIZ NEWS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Business Briefs July 25, 2017 27 Stocks end lower on large-cap firms 27

    Vietnam stocks fall for third straight day 28 Brokerages: Market outlook turns negative 28 EVN to sell stake in its finance subsidiary 29 Investors can apply for outbound tour operating licenses online 29 Freight exchange platforms on the rise 30 Just one inspection/year at hotels 30 Deposit agreements need to be properly managed 31 Hybrid corn seeds dominate fields in Vietnam 31 88,560 smuggling cases detected in H1 32 Opinion: Why Vietnam needs to expand visa exemption policy 32 Cat Linh-Ha Dong urban railway behind schedule over

    financial constraints 34 QTSC spurs smart city model 34 Siemens lights the way to Industry 4.0 35 PVN exports 355 million tonnes of crude oil in 30 years 37 TAC announces 34pct rise in profits in Q2 37 Viettel makes bank from international markets 37 Blue HK invests in Beta Media 39 Saigon Plant Protection company opens branch in Burma 39 Vietnam's first ultra-clear float glass factory built 40 Bosch to pump extra $47m in Dong Nai 40 Da Lat weasel coffee opens 3rd HCM City shop 40 Mai Linh confident in competition with Grab and Uber 41 Formosa should consider environmental issue as crucial to

    its survival: PM 42 $3.2 billion Vung Ro Refinery and Petrochemical project

    warned over 42 Vinafis objects to discharge of dredged sediments into sea 43 Mandarin Garden 2 flats to be handed over to buyers

    at year's end 44 Lap An Lagoon, where sea and mountain meet 44 Bridgestone Vietnam sponsors 50 smart bins in Da Nang 46 Vietnam aquatic, Tra fish festival scheduled for October 46 Workshop promotes sustainable rubber planting 47 HCM City to host Export Forum 47 Vietnamese Goods Week in Thailand delays till August 48


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    FINANCE Reference exchange rate stays flat


    The State Bank of Vietnam kept the daily reference exchange rate for VND/USD on July 25 unchanged from the previous day at 22,429 VND. With the current trading band of +/- 3 percent, the ceiling rate applied for commercial banks during the day is 23,102 VND and the floor rate 21,756 VND per USD. The opening hour rates at commercial banks saw slight changes. Vietcombank cut both rates by 5 VND to 22,695 VND (buying) and 22,765 VND (selling). Meanwhile, BIDV maintained the rates at the same level as on July 24, at 22,700 VND (buying) and 22,770 VND (selling). Techcombank listed the buying rate at 22,685 VND, down 5 VND, and selling rate at 22,770 VND, down 10 VND.

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    Vietnam finance & business 25 July 2017

    Central bank firm on bad-debt resolution


    The State Bank of Vietnam (SBV) is working hard towards settling bad debts and re- structuring the banking system by 2020, Nguoi Lao Dong newspaper reports. The SBV last Friday held a teleconference on the National Assembly's Resolution No. 42/2017/QH14 on settlement of non-performing loans (NPLs) on a trial basis, and the prime minister's decision on the restructuring of credit institutions in 2016-2020. Resolution No. 42 is aimed at removing legal barriers to banks' settlement of bad debts and assets used as collateral for loans by creating a synchronous and effective mecha- nism for the prompt handling of bad debts, said SBV governor Le Minh Hung. According to the central bank, the bad debts sold to the Vietnam Asset Management Company (VAMC) accounted for a mere 5.81 percent of total outstanding loans as of late last year. If the debts which have been restructured are taken into account, NPLs would make up 10.08 percent of the total. The central bank's target is to bring down the ratio of NPLs, including those sold to VAMC and being classified, to less than 3 percent of total outstanding loans by 2020, excluding bad debts of loss-making commercial banks. Trinh Ngoc Khanh, board chair of the Vietnam Bank for Agriculture and Rural Devel- opment (Agribank), said at the teleconference that his bank would write off the penal- ties on those failing to pay interest on time, and adjust down interest rates for all NPLs prior to August 15. Agribank is expected to reduce overdue interest payments by around VND30 trillion for those debts settled by the bank or sold to VAMC. It plans interest rate reductions, even by 100%, to encourage its debtors to pay debts. If its debtors respond positively to this plan, the bank could collect about VND40 trillion, said Khanh. http://english.thesaigontimes.vn/55167/Central-bank-firm-on-bad-debt-resolu- tion.html

    Consumer credit grows rapidly as retailers thrive


    The appearance of big foreign retail chains like CircleK, Shop&Go, FamilyMart and Aeon and the strong rise of Vietnamese chains Vinamart, Co-op and The Gioi Di Dong have fostered the development of consumer credit in Vietnam, according to the State Bank of Vietnam. StoxPlus' 2016 report on Vietnam's consumer credit showed that the credit market has seen amazing leaps in recent years. The outstanding loans of Vietnam consumer finance soared from $7.3 billion in 2012 to $26.55 billion in 2016. Though it still accounts for a small proportion (9.8 percent by the end of 2016), consumer finance has been growing very quickly. Nguyen Tu Anh, deputy director of SBV's Monetary Policy Department, confirmed that consumer credit has been developing strongly thanks to many favourable condi- tions. Vietnam has 92 million people with 70 percent of the population aged 15-64, while its GDP growth rate has been stable at over 6 percent in recent years. Anh cited research by economist Nguyen Thi Hien and her co-workers that shows the consumer credit market's rapid development since 2011. The growth rate was 30 per- cent per annum in 2011-2014 and 59 percent in 2015. The total outstanding consumer loans granted to customers in 2015 was VND583 tril- lion, equivalent to 20.5 percent of the consumption value of individuals and house- holds. If not counting housing loans as per international practice, consumer outstanding loans in 2015 would total VND272.241 trillion (equivalent to 6.62 percent of GDP). The figure is higher than that of China (6 percent) and Japan, but much lower than other developed countries, including the US (17 percent), Europe (14 percent), and Korea over (20 percent). The constant increase of consumption has led to higher demand for consumer loans. Meanwhile, the stable and high economic growth rate helps consolidate people's belief in their income in the future, thus encouraging them to borrow money. Vietnam is in a so-called golden population period with a high percentage of young consumers. As the growth rate of lending to fund production and business has slowed down for several reasons, banks tend to increase consumer credit to offset the slowdown. FE Credit is leading the consumer finance market with $1.4 billion worth of loans pro- vided in 2016, accounting for 48 percent of market share.

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    Vietnam finance & business 25 July 2017

    Its rivals, Home Credit, HD Saison and Prudential, hold 15.7 percent, 12.2 percent and 8.1 percent, respectively, according to StoxPlus. http://english.vietnamnet.vn/fms/business/182419/consumer-credit-grows-rapidly- as-retailers-thrive.html

    Prime minister approves scheme on banking sector restructuring


    The prime minister has issued Decision No.1058/QD-TTg approving the scheme on "Restructuring the system of credit institutions associated with bad debt settlement in the 2016-2020 period". The main content of the scheme is to continue restructuring the system of credit insti- tutions with the focus on dealin