Speaking at the conference to review the Party's work and business activities in 2023 and deploy tasks in 2024 of the Joint Stock Commercial Bank for Foreign Trade of Vietnam ( Vietcombank ) on the morning of January 6, Deputy Governor of the State Bank Pham Quang Dung said that 2023 will be very difficult both domestically and internationally, accumulating all the difficulties from many previous years and continuing at a higher level.
Deputy Governor of the State Bank Pham Quang Dung speaks at the conference.
In that context, the State Bank has synchronously deployed monetary policy tools to make an important contribution to stabilizing the microeconomy and promoting economic growth.
GDP growth in 2023 reached 5.05%, lower than planned but quite high compared to the region and the world; inflation was controlled at 3.25%; credit growth of the whole system reached about 13.7%, which is also a very impressive figure. "Interest rates have decreased by more than 2% compared to the end of 2022, at a record low in recent years," said Mr. Dung.
Recognizing the important role of the banking industry and the contributions of state-owned banks, including Vietcombank, the Deputy Governor of the State Bank emphasized some outstanding results of Vietcombank.
Specifically, 2023 is another year that Vietcombank continues to lead the banking industry in terms of quality and operational efficiency. Its scale remains at over VND 1.8 million billion in total assets; capital mobilization reaches over VND 1.4 million billion, up 12%; credit reaches nearly VND 1.3 million billion, up nearly 11%.
"In addition, credit quality is basically under control, with the bad debt ratio at 0.97%. Compared to all other state-owned commercial banks, this is the lowest bad debt ratio and perhaps also the lowest bad debt ratio in the banking industry," Mr. Dung acknowledged.
The Deputy Governor also mentioned the aspect of business efficiency scale, Vietcombank's pre-tax profit in 2023 was 40,456 billion VND, continuing to lead the banking industry, up about 10% over the same period last year...
Flexibility to effectively utilize credit growth room
Speaking at the conference, Mr. Nguyen Thanh Tung, General Director of Vietcombank, commented that the world economic outlook for 2024 is forecast to have a "soft landing" because the risks of deceleration still overwhelm growth momentum.
Businesses are still concerned about expanding production and business due to the existing interest rate risks and geopolitical tensions that continue to erode international trade. Protectionist barriers restricting the import and export of essential goods also distort international trade.
Mr. Nguyen Thanh Tung, General Director of Vietcombank, speaking at the conference
Vietcombank sets the following growth targets for 2024: total assets increase by at least 8%; credit increases by at least 12% and within the limit assigned by the State Bank; bad debt below 1.5%; pre-tax profit increases by at least 10%.
Sharing the same opinion that 2024 still has many difficulties and challenges for the Vietnamese economy, the banking industry in general and Vietcombank in particular, Deputy Governor Pham Quang Dung suggested Vietcombank's capital representatives and management thoroughly grasp and especially focus on effectively implementing monetary, credit and foreign exchange solutions.
This year, the bank was assigned a credit limit very early, at the beginning of the year it was assigned a credit limit of approximately 16%. This is a very high credit limit compared to domestic banks.
This credit limit is calculated by the formula 3.5 times multiplied by the score according to Circular 52. Vietcombank of course has the highest score among state-owned commercial banks and is also one of the banks with the highest score, so this credit growth rate is one of the highest growth rates in the banking industry.
Deputy Governor of the State Bank Pham Quang Dung
"Therefore, Vietcombank needs to have measures to flexibly take advantage of the assigned credit growth room early and effectively... Along with that, implementing solutions to increase credit growth safely and effectively, improve credit quality, and resolutely control and handle bad debt," said Mr. Dung.
With the recommendations made by Vietcombank at the conference on salary mechanism and charter capital increase, Mr. Dung spent more time clarifying the content of charter capital increase.
Emphasizing that this is an urgent and natural requirement for state-owned commercial banks to have resources to expand operations and better meet the needs of socio-economic development, the Deputy Governor of the State Bank suggested that Vietcombank coordinate with two other similar commercial banks, the Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) and the Vietnam Joint Stock Commercial Bank for Industry and Trade (VietinBank), to propose to the State Bank, the Government, and the Ministry of Finance in a different direction, not to propose each time.
"Currently, we have a Banking Development Strategy until 2025, with a vision to 2030. We should request a mechanism for capital increase as a component of this strategy so that we do not have to request it again each year. Requesting it each time like this is extremely time-consuming, and we, the State Bank, the Ministry of Finance, the Government Office and the National Assembly all waste time," Mr. Dung emphasized.
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