14:21 | 13/04/2016 Finance - Banking
Vietnam’s lenders are gathering speed, posting the second-highest growth by country in this year’s ranking of the top 100 banks in the Association of Southeast Asian Nations (ASEAN).
An employee at a Vietcombank branch in Hanoi (Photo: VNA)
The largest increase in the ranking goes to Cambodia, which grew by 30.4 percent, although it has only one lender – Acleda Bank – recognised on the list.
Vietnamese banks – 19 of which made the ranking – grew their assets by the second-highest amount, 15.66 percent, and although they still contribute a relatively small share of the total assets in the ranking, 7.46 percent, they are up from 6.21 percent in the previous year.
The ranking remains dominated by Malaysia, Singapore and Thailand, which jointly hold nearly three-quarters of the total assets.
With an aggregate return on assets (ROA) of 0.8 percent and return on capital (ROC) of 12.19 percent, Vietnam is placed at the tail-end of the ASEAN ranking for returns. The champion in that category is Indonesia, which boasts an ROA of 2.7 percent and ROC of 25.31 percent.
Vietnam’s banks stood out in terms of asset growth, with Vietnam Prosperity Bank coming out on top with a 35.02 percent increase, followed by local competitors Saigon Commercial Bank and Shinhan Bank Vietnam, which expanded by 34.22 percent and 33.32 percent, respectively.
The country’s banks look to be poised to continue this rise. In addition to robust growth and stability, banking penetration remains among the lowest in the region. Only 30.86 percent of the population aged 15 or over had a bank account in 2014 in a country of 91 million people.
However, as Vietnamese banks expanded their operations, they did not raise capital at a corresponding pace. Vietnamese banks registered a meagre 4.54 percent uptick in Tier 1 capital, the lowest ranking among the countries measured.
Although the local banks are among the least profitable in the ranking, the situation is improving, with Vietnam showing a six percent increase in pre-tax profits, a larger hike than for any other country except Singapore, where profits increased by 10.91 percent..
Still, "Vietnam is on its way to becoming a heavyweight presence in Southeast Asia, with the top ranking for asset growth," The Banker’s data editor Matthew Karwacki wrote in an online report released this month./.