60 vocab

1. Banking: ngân hàng

2. Profitability: khả năng sinh lời
3. Forecast: dự báo
4. Strengthen:tăng cường
5. Predicts:dự đoán
6. Industry’s:ngành
7. Return on average assets:tỷ suất sinh lời trên tài sản bình quân
8. Recover: phục hồi
9. Wider:rộng hơn
10. Net interest margins:biên lãi ròng
11. Stronger loan growth: tăng trưởng cho vay mạnh hơn
12. Support capital generation:hỗ trợ tạo vốn
13. Money: tiền
14. Transaction: giao dịch
15. Economic: kinh tế
16. Slowdown: chậm lại
17. Non-performing loans: nợ khó đòi
18. Domestic: trong nước
19. Operating: điều hành
20. Conditions: điều khiển
21. Improvements: cải tiến
22. Borrower: bên vay
23. Serviceability: khả năng phục vụ
24. Asset quality:chất lượng tài sản
25. Analysts forecast: các nhà phân tích dự báo
26. Report: báo cáo
27. Released: đã phát hành
28. Vietnam Investors Service: dịch vụ nhà đầu tư Việt Nam
29. Predicts: dự báo
30. Resources: nguồn lực
31. Various Government: chính phủ khác nhau
32. Policies: chính sách
33. Legal: pháp lí
34. Regulation: quy định
35. Boost: tăng cường
36. Consumption: tiêu thụ
37. Effect: tác dụng
38. Business: kinh doanh
39. Alleviate: làm dịu
40. Repayment burden: gánh nặng trả nợ
41. Restructuring: tái cơ cấu
42. Exporsures: phơi nhiễm
43. Developers: nhà phát triển
44. Approvals: phê duyệt
45. Commence: bắt đầu
 46. High leverage: đòn bẩy cao
47. Key risk: rủi ro chính
48. Sector: lĩnh vực
49. prior year: năm trước
50. credit demand : nhu cầu tín dụng
51. real estate developers: nhà phát triển bất động sản
52. settlement services: dịch vụ thanh toán
53. offsetting weak sentiment: bù đắp tâm lí yếu kém
54. products: sản phẩm
55. lower investment income: thu nhập đầu tư thấp hơn
56. Credit costs: chi phí tín dụng
57. remain broadly flat: nhìn chung vẫn bằng phẳng
58. adequacy: sự thỏa đáng
59. alongside:cùng với
60. threshold:ngưỡng

bài tóm tắt

The Vietnamese banking industry is forecasted to experience a strengthening of profitability in 2024,
according to Vietnam Investors Service (VIS Rating). This improvement is expected to be driven by wider
net interest margins (NIM), stronger loan growth, and enhanced capital generation.

The economic slowdown and rise in non-performing loans (NPL) experienced in the previous year are
anticipated to be overcome, with better domestic operating conditions and low interest rates
contributing to improvements in borrower debt serviceability and asset quality.

VIS Rating predicts that the return on average assets (ROAA) of the industry will recover due to wider
NIMs and stronger loan growth, supporting capital generation. Additionally, steady funding and liquid
resources are expected to be maintained, with deposit growth keeping pace with credit growth, and
banks increasing longer-term funding.

The formation rate of NPLs is forecasted to slow down as borrower debt repayment capability improves.
Government policies and regulatory changes aimed at boosting investment and domestic consumption
are expected to stimulate business activities and strengthen operating cash flows for domestic
businesses. Low interest rates are anticipated to alleviate repayment burdens and improve debt
serviceability for retail and small- and medium-sized enterprise (SME) borrowers.

Despite these positive forecasts, challenges remain, particularly high leverage and slow recovery in cash
flows for developers involved in legal issues and speculative projects, posing risks to bank asset quality.

Overall, profitability is expected to improve in 2024 due to wider NIMs and stronger loan growth. The
sector-average ROAA is predicted to marginally increase, with most banks benefiting from re-pricing
deposits at lower rates compared to loans. However, credit costs are anticipated to remain high as banks
replenish their provision coverage. Capital adequacy ratios are expected to remain weak, although
internal capital generation is projected to improve to support business growth.
In conclusion, the Vietnamese banking sector is forecasted to see improved profitability in 2024,
supported by various factors such as wider net interest margins, stronger loan growth, and enhanced
capital generation, despite lingering challenges in asset quality and capital adequacy.

Bài báo
Việt Nam’s banking profitability forecast to strengthen in 2024
Vietnam Investors Service (VIS Rating) predicts the industry's return on average assets (ROAA)
will recover from wider net interest margins (NIM) and stronger loan growth and support capital
generation.

HÀ NỘI — After enduring a year of economic slowdown and rise in non-performing loans (NPL) last
year, profitability of the Vietnamese banking industry will strengthen in 2024 as stronger domestic
operating conditions and low interest rates drive improvements in borrower debt serviceability and asset
quality, analysts forecast.

In a report released this week, Vietnam Investors Service (VIS Rating) predicts the industry's return on
average assets (ROAA) will recover from wider net interest margins (NIM) and stronger loan growth and
support capital generation.

In addition, funding and liquid resources will remain steady as deposit growth keeps pace with credit
growth and banks increase longer-term funding.

According to VIS Rating, NPL formation rate will slow as borrower debt repayment capability improves
amid stronger domestic operating conditions and low interest rates. Various Government policies and
legal regulation changes to boost investment and domestic consumption will take effect and help drive
business activities and stronger operating cash flows for domestic businesses. Low interest rates will
alleviate the repayment burden and improve debt serviceability for retail and small- and medium-sized
enterprise (SME) borrowers.

“We expect the sector-average NPL ratio will decline to 1.7-1.8 per cent in 2024 from a five-year high of
1.9 per cent in 2023. The pace of loan restructuring (some 1.2 per cent of total loans) will stabilise. Asset
risk from real estate exposures will continue to stabilise as developers obtain the necessary legal
approvals to commence project development and gain access to financing,” VIS Rating said in the report.
However, the report said, high leverage and slow recovery in cash flows for developers embroiled in legal
issues and/or speculative projects will continue to be a key risk to bank asset quality.

According to the report, profitability will improve from wider NIM and stronger loan growth.

In 2024, VIS Rating expects sector average ROAA will increase marginally to 1.7 per cent in 2024 from
1.6 per cent in 2023 as NIMs widen by 20-30 basis points from the prior year to around 3.8 per cent. Most
banks will be able to re-price deposits at lower rates quicker than loan. Loan growth will increase to 14-
15 per cent, driven by credit demand from domestic trade, manufacturing and real estate developers. Non-
interest income growth will be modest, driven mainly by settlement services, offsetting weak sentiment in
bancassurance products and lower investment income. Credit costs will remain high as banks replenish
their provision coverage from tough levels in 2023, especially mid- and small-sized banks.

VIS Rating believes the loss absorption buffer will remain stable as internal capital generation improves
to support business growth. Even as profits improve to support provisioning and replenish capital, we
expect bank capital levels to remain broadly flat in 2024. Only a few banks have announced capital-
raising plans. Overall, the banking sector’s capital adequacy ratio will remain weak at around 11-12 per
cent. Provisioning coverage for mid- and small-sized banks will remain lower than sector average as they
will take longer to raise provisioning levels following severe asset quality deterioration in 2023.

Funding and liquid resources will remain stable as deposit growth keeps pace with credit growth and
banks increase longer-term funding. We expect banks’ deposit growth will be supported by stronger
corporates’ cash flows alongside improved business conditions. Moreover, banks will actively seek new
long-term bond funding to maintain short-term funding to medium- and long-term loan ratios (SMLR)
below the 30 per cent threshold. — VNS