Profitability of banks in Vietnam has declined. (Photo: Internet)
The Return-on-Assets (ROA) and Return-on-Equity (ROE) on the local banking system slid to 0.52% and 5.79%, respectively, local newswire VnExpress.net reported, citing SBV data.
Banks have increased provisions for credit risks under stricter asset classification rules, which eat into their profitability, experts have said.
The bad debt ratio of the system was brought down from 4.83% at the end of 2014 to 2.72% at the end of November, equivalent to some 121 trillion dong ($5.38 billion). As much as 99.6% of troubled loans identified in September 2012 have been cleaned up, the SBV said on Dec. 24.
Total assets of banks in Vietnam increased 5.37% from December 2014 to 6,865 trillion dong ($305 billion) at the end of October 2015, SBV data showed.
Meanwhile, total registered capital of the banking system went up 5% from the end of 2014 to 457.41 trillion dong ($20.33 billion) and its owner’s equity up 12.33% to 557.78 trillion dong ($24.8 billion).
According to the National Financial Supervisory Commission (NFSC), the government’s financial watchdog, total profits of the banking system dropped 25.8% year-on-year in 2014 and fell 8.7% year-on-year to 9.94 trillion dong ($451.6 million) in the first quarter of 2015.