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Banking & Finance

NFSC reports positive signs for enterprises

Released at: 15:21, 01/12/2015

NFSC reports positive signs for enterprises

Indicators in National Financial Supervisory Commission report in good shape.

by Hung Nguyen

The National Financial Supervisory Commission (NFSC) has released it latest report on Vietnam’s economic situation over the first eleven months of the year.

The banking sector saw stable liquidity and sustainable development, in which risk provisions were high. During November the loan-to-deposit ratio (LDR) was under 80 per cent, with an LDR in credit granting and foreign currency activities at just over 80 per cent, which is under the safety level. Credit flow moved more towards short-term lending. Although the increase in credit was relatively high, the net interest margin (NIM) only rose slightly as banks set higher risk provisions, which also brought down profit margins. 

2013

2014

2015 (Based on Jan - Nov)

NIM

2.8 per cent  

2.7 per cent

 2.8 per cent

ROE

6.4 per cent  

4.6 per cent  

4.9 per cent

ROA

0.6 per cent  

0.4 per cent  

0.4 per cent

Table: Main banking sector indexes

Revenue from non-financial enterprises in the first nine months increased 26.37 per cent year-on-year. ROA and ROE reached 4.61 per cent and 10.76 per cent, respectively, for an increase of 1.33 points, or 0.79 per cent higher year-on-year. ROA and ROE at SMEs were 2.37 per cent and 5.46 per cent, against -1.64 per cent and -1 per cent in the same period of 2014.

The Index of Industrial Production (IPP) in the first eleven months increased 9.7 per cent, 2.2 per cent higher than the 7.5 per cent growth recorded in the same period last year. The manufacturing index rose 10.1 per cent, compared to 8.1 per cent growth in the same period last year.

The Purchasing Managers’ Index (PMI) increased slightly, to 50.1 points from 50 points in September. The NFSC said that the general PMI for all of 2015 would be 52 points; much the same as in 2014 (52.4 points).

Exports also saw increases, with turnover increasing 8.3 per cent in the first eleven months against the same period last year, which is higher than the average rise in global export turnover indicated by the Word Bank, of 5.1 per cent, 8 per cent in ASEAN, and 6.8 per cent in China. However, the increase is mostly due to the foreign sector, while export turnover from the domestic sector fell 2.6 per cent against the same period last year. The trade deficit/total export turnover ratio was at 2.5 per cent, showing a downward trend and lower than the target of 5 per cent set by the National Assembly.

The number of newly-registered enterprises in the eleven months increased 28.1 per cent and by 37.7 per cent in terms of capital against the same period of 2014. The number of enterprises closing fell 2.2 per cent year-on-year.

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