Access to this massive amount of data allows banks to expand their digital offerings, particularly online lending.

According to the State Bank of Vietnam, the banking sector’s digital transformation has recently achieved encouraging results, contributing to the overall development of the national economy. In particular, cashless payment activities have been widely implemented and witnessed remarkable growth.

To maintain growth momentum, banks should strengthen their internal capabilities, enhance risk management, improve their financial health and diversify channels for mobilising medium- and long-term capital.

The Vietnamese Government set the target of an economic growth rate of 8% or higher for 2025. To achieve these ambitious goals, the banking sector, especially commercial banks, is expected to take a leading role, acting as a financial lever to unlock potential, opportunities, and new momentum for national development.

SBV Deputy Governor Dao Minh Tu stated that an average credit growth of over 2% would contribute to a 1% increase in the country's GDP. Therefore, for 2025, the central bank aims for a credit growth target of around 16% to contribute to the economic growth target of 8%.

Prime Minister Pham Minh Chinh outlined major measures for the banking sector in 2025, such as reducing operational costs, improving efficiency, and prioritising public welfare by offering lower lending rates, particularly in sectors that drive employment and economic restructuring.

PM Chinh highlighted the global shifts and policies impacting Vietnam since the start of the year, prompting the organisation of this meeting to assess the current situation and gather input from businesses and banks.

Prime Minister Pham Minh Chinh has urged Vietnam’s banking sector to overcome challenges and limitations to achieve breakthroughs this year.

Prime Minister Pham Minh Chinh has urged the banking sector to make an important contribution to maintaining macroeconomic stability, promoting growth, ensuring major balances; reducing costs to reduce lending rates; and providing credit to prioritised industries and programmes.

Prime Minister Pham Minh Chinh has asked the State Bank of Vietnam (SBV) to proactively, flexibly, promptly, and effectively manage the monetary policy in combination with the expansionary fiscal policy and others.

Analysts predict peak bond maturity pressure in the fourth quarter of this year, with the real estate sector facing the most significant burden at over 43% by October 4.

The Bank for Investment and Development of Cambodia (BIDC) - a subsidiary of the Bank for Investment and Development of Vietnam (BIDV) in Cambodia, held a ceremony on September 6 to receive a noble award from the King of Cambodia and celebrate its 15th founding anniversary.

Banks will need to issue new Tier-2 capital bonds to replace maturing bonds and bolster their capital adequacy ratios, said experts.

Credit growth bright spot for banking

Prime Minister Pham Minh Chinh has set three major digital transformation targets for the banking sector, including creating the most favourable conditions for people, businesses and agencies to access banking services.

The corporate bond market is expected to remain relatively sluggish until the end of the first quarter of 2024, as conditions for issuing and trading corporate bonds tighten.

Prime Minister Pham Minh Chinh on January 8 asked the banking sector to maintain its role as the “blood of life” for the national economy, while addressing a conference in Hanoi on January 8.

The banking sector will continue to face great challenges in 2024, especially those from bad debts when Circular 02/2023/TT-NHNN of the State Bank of Vietnam on credit institutions and foreign bank branches' debt rescheduling and maintaining loan categories to help clients in difficulties expires on June 30, 2024.

Over 209.15 trillion VND (over 8.61 billion USD) was raised from the issuance of corporate bonds in the first 10 months of 2023, according to data compiled by the Vietnam Bond Market Association (VBMA) from the Hanoi Stock Exchange (HNX) and the State Securities Commission (SSC).

Many domestic banks have reported positive growth in profit in the third quarter and the first nine months of 2023 even amid the slow credit expansion and a downturn trend in profit of the whole banking sector.