Vietnam Banking &amp Financia

Q2 2022
www.fitchsolutions.com
Vietnam
Banking & Financial Servic
Services
es
Report
Includes 10-year forecasts to 2031
Vietnam Banking & Financial Services Report | Q2 2022
Contents
Key View............................................................................................................................................................................................ 5
Banking Industry Risk Indicator ............................................................................................................................................... 7
Banking Industry Risk Indicator Scores ...............................................................................................................................10
SWOT ................................................................................................................................................................................................11
Banking & Financial Services SWOT ....................................................................................................................................................................................11
Banking ...........................................................................................................................................................................................12
Banking Snapshot ......................................................................................................................................................................................................................12
Financial Stability Risks Remain Elevated In Vietnam, But Strong Economic Recovery Should Help Banks.........................................13
Forecast Tables ............................................................................................................................................................................................................................16
Competitive Landscape ..........................................................................................................................................................................................................18
Regulatory Environment .........................................................................................................................................................................................................23
Insurance........................................................................................................................................................................................24
Insurance Snapshot...................................................................................................................................................................................................................24
Asset Management .....................................................................................................................................................................30

Asset Management Snapshot ...............................................................................................................................................................................................30
Stock Exchanges..........................................................................................................................................................................33
Stock Exchanges Snapshot ....................................................................................................................................................................................................33
Macroeconomic Overview ........................................................................................................................................................38

Vietnam's Economy To Bounce Back In 2022 ................................................................................................................................................................38
Macroeconomic Forecasts .....................................................................................................................................................................................................43
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Household Income Forecasts ...............................................................................................................................................................................................45
Vietnam Demographic Outlook ..............................................................................................................................................47
Banking & Financial Services Methodology........................................................................................................................50
Banking Industry Risk Indicator Methodology ..................................................................................................................51
Key View
Key View: The long-term prospects for Vietnam's banking and financial services industry remain bright as economic growth
averaging around 6.5% per annum through to 2030 will support rising incomes and expand the already-growing middle class.
Vietnam's government is relatively stable and is open to cooperating with the rest of the Asian region which will support the
adoption of new technologies and best practice in the industry. Once the Covid-19 pandemic has abated, we expect the
government to start to reduce state ownership in the sector and to continue to adopt policy to boost both private sector and
foreign involvement in local capital markets.
Vietnam’s banking sector assets are not as concentrated as in some developing countries but the state has a large role in the sector.
Although banks been slow to adopt Basel standards for capital adequacy, in recent years they have made strides in reducing non-
performing loans and aligning loan growth with increases in deposits.
Life insurance providers issue nearly 69% of the total premiums written in Vietnam and the sector is dominated by large
multinational insurers. This is a stark contrast to the non-life sector which is highly fragmented and dominated by firms which have
strong ties to state-owned enterprises. The non-life segment is driven primarily by health and accident insurance but the prospects
for expanding vehicle and property cover are strong.
The asset management industry is comprised of primarily high-net-worth individuals since there are few institutional investors in
Vietnam. The demand for asset management services will certainly rise in coming years if the surge in new individual trading
accounts opened in 2021 is any indication of the interest in investing on the part of the rising middle class.
The development of Vietnam's stock market has entered a new phase. The government is in the process of re-organising the
country's two exchanges under a single entity so that one exchange focuses on stocks and the other on bonds and other products.
There is ongoing cooperation between Vietnam, Japan and the Association of Southeast Asian Nations to help integrate Vietnam’s
stock market into the broader Asian financial sector. Though on hold since the Covid-19 pandemic, the government's intent to
accelerate the privatisation of state-owned firms should provide a foundation for the expansion of the country's financial markets
over the medium term.
Favourable Demographics Underpin Positive Long-Term Outlook For Financial Services

Vietnam - Working Age Population, 15-64, '000
e/f = Fitch Solutions estimate/forecast. Source: UN, Fitch Solutions

Latest Trends And Developments
• We forecast bank credit growth of 15.0% in 2022, driven by a strong rebound in economic growth. However, national
indebtedness continues to rise and the relatively under-capitalised banking sector remains vulnerable to an increase in non-
performing loans.
• The value of total insurance premiums written is expected to have risen by 17.4% in 2021, an increase in our previous estimate,
and for 2022 we forecast a 12.9% gain. Growth is projected to average just over 11% per annum through 2026 across both
sectors as the expansion in life insurance coverage accelerates.
• The total value of assets under the management by fund management companies in Vietnam reached approximately
VND570.0trn (USD24.7bn) in 2021. This represents a 31% y-o-y growth rate. The regulator reported that from 2015 to the end of
2021, AUM grew by an average of 15-25% per annum.
• Both of Vietnam’s main stock exchanges rose sharply in 2021 on the back of significantly higher trading volumes, driven by a
surge in new investment accounts opened during the year.
Banking Industry Risk Indicator

Banking Industry Risk Indicator
Note: Scores out of 100; higher scores imply lower risk. Source: Fitch Solutions
Key View: Vietnam's Banking Industry Risk Indicator (BIRI) score in Q421 was 33.45. We assess 122 markets, where first indicates
the lowest risk and 122nd is the highest risk. Vietnam is in 89th position, indicating that its banking sector risk is moderately high
relative to the other markets we assess.
Falling Below Multi-Year Average

Vietnam – BIRI Scores & Historical BIRI Average
BIRI Overview: Vietnam’s BIRI score has been declining since Q419, implying that overall risk has been rising. The market's scores
for the International Linkages and Volatility metrics are high, but its Government Finance and Financial Component scores have
fallen. Vietnam ranks 89th of the 122 markets captured in our analysis. Of the 16 markets included in the Asia Pacific region,
Vietnam ranks as the eighth least risky market.
Financial: The Financial component score declined to 30.06 in Q421, from 36.40 in Q419, implying rising risks. Its capital buffers
have been trending downwards, while underlying asset quality has been falling despite headline non-performing loan figures
holding up.
Economic Volatility Has Led To Heightened Risks

Vietnam - BIRI Component Scores
Government Finance: Vietnam’s Government Finance score was 40.61 in Q421, down from its Q321 level of 42.14 and implying
higher risk. Among the 122 markets in our analyses, Vietnam ranks 79th in this category, which means its risk is relatively average
compared to the rest of the world. In Q421, all three factors in this score – General Government Debt (% of GDP), General
Government Interest Payments (% of revenue) and General Government Balance (% of GDP) – indicated more of a government
debt burden than last quarter.
Regulatory Quality & Environment: Vietnam’s Regulatory Quality & Environment has generally improved over the years, with
the score standing at 45.46 in Q421. The country's business environment has continuously improved due to the economic reforms
adopted by the Vietnamese authorities beginning in 2016, which were aimed at making the market more attractive to foreign direct
investment.
Living Standard: Vietnam's Living Standard component score was 52.94 in Q421, up from 52.82 in Q221 and implying lower risk.
Continued rises in this score are the result of strong economic growth in Vietnam, which has lifted GDP At PPP, USD Per Capita to
8,869. Vietnam ranks 95th of 122 markets for this metric.
International Linkages: Vietnam’s International Linkages component score dropped to 68.32 in Q421 from 68.82 in Q321,
implying higher risk to the banking sector from this component. Vietnam has a very high rank of 10th position for this metric when
compared to the other 122 markets we assess. The two factors in this score are very favorable for Vietnam. Gross external debt (% of
GDP) stood at just 34.5% while the country’s Current account balance (% of GDP) indicates a sizeable surplus.
Economic Volatility: The Economic Volatility score for Q421 declined to 58.87 from 60.00 in Q321, implying higher risk. This
score reflects rising volatility in both economic growth and inflation in the country. After averaging more than 6.0% from
2010-2019, real GDP growth dipped to 2.9% in 2020 and 2.6% in 2021 due to economic disruptions caused by the pandemic.
Banking Industry Risk Indicator Scores

ASIA-PACIFIC BANKING INDUSTRY RISK INDICATOR SCORES
Regulatory
Government Living International
BIRI Financial Quality & Volatility
Finance Standard Linkages
Environment
Singapore 88.00 51.50 56.10 100.00 100.00 80.84 62.47
Hong Kong 87.37 73.63 61.89 92.11 94.99 67.31 44.22
Taiwan 77.91 30.31 66.21 90.35 87.93 90.47 78.60
Australia 72.89 49.99 40.60 88.87 92.20 55.56 66.01
South Korea 71.92 48.13 58.08 85.58 80.75 55.37 74.24
Japan 67.04 47.87 32.18 84.61 86.65 51.78 71.05
Malaysia 63.98 66.42 35.07 76.29 73.39 63.47 44.50
New Zealand 59.29 25.45 47.77 85.60 92.77 41.52 67.09
Indonesia 53.52 68.49 33.26 60.28 51.64 52.86 65.81
China 51.23 45.09 49.58 67.96 54.51 63.34 63.00
Thailand 41.55 41.72 42.45 68.02 53.72 46.73 50.56
Maldives 39.89 96.75 7.59 67.25 29.85 24.41 23.84
Philippines 37.27 58.24 33.85 53.45 41.68 54.80 42.69
Solomon Islands 33.60 94.57 56.79 25.66 11.33 44.78 37.54
Vietnam 33.45 30.06 40.61 52.94 45.46 68.32 58.87
Pakistan 31.75 73.94 14.25 42.18 24.13 50.74 53.56
Sri Lanka 30.81 53.50 0.00 62.76 40.32 43.32 49.95
India 25.42 42.65 14.98 49.93 46.78 55.43 36.12
Vanuatu 25.03 56.04 63.29 35.00 23.09 25.94 53.74
Fiji 21.67 52.61 31.17 55.54 36.77 16.78 27.80
Bangladesh 21.11 40.67 34.50 43.79 19.25 50.78 61.99
Afghanistan 16.54 98.19 30.76 25.18 0.00 0.00 37.23
Cambodia 14.45 20.61 61.73 41.32 26.84 33.56 57.39
Note: Includes territories and special administrative regions. Scores out of 100; higher scores imply lower risk. Source: Fitch Solutions
SWOT
Banking & Financial Services SWOT
SWOT Analysis
Strengths • Vietnam's economy is expected to post real GDP growth of around 6.5% per annum through to 2030 which
will allow income levels to steadily rise.
• The country has a large and growing population with a high savings rate and potential for faster income
growth.
• The government is relatively stable and is open to foreign cooperation in integrating its financial services
markets with the rest of Asia.
• The government has stated a willingness to speed up the process of privatising state-owned banks and
other entities which will provide additional domestic investment opportunities.
Weaknesses • Domestic banks continue to lag behind their foreign peers in terms of financial strength and the
technological curve and have been slow to implement Basel standards for capital adequacy.
• Many domestic non-life insurance companies are sub-scale and lack ready access to new capital.
• Most Vietnamese households do not have sufficient income to purchase non-essential insurance products.
• The country's two stock exchanges lack scale in a competitive region, and the continued lack of new
IPOs remains limits their attractiveness.
Opportunities • There is significant potential for adopting cash-free payment systems and new mobile banking and
insurance technologies which the State Bank of Vietnam is encouraging.
• Rising wealth may allow households to expand insurance cover and take advantage of financial planning
activities.
• If executed, the government's divestment programme should support growth in the local capital market.
• Vietnam's government is gradually easing restrictions on foreign companies and appears more receptive to
overseas investment and ownership.
Threats • There is limited private sector competition in the banking and non-life insurance sectors.
• Continued high levels of government debt could yet trigger a fiscal crisis, undermining confidence in the
banking sector.
• Though foreign competition is needed, allowing ASEAN and EU banks to have more of a presence may
threaten domestic development.
• Preferences for traditional investments such as gold and property could constrain the expansion of financial
planning and asset management activities.
Banking
Banking Snapshot
Key View: Vietnam’s banking sector is dominated by its top four banks, all of which are at least partly state-owned. The smaller
banks struggle with scale and recently there have been a number of announcements regarding banks issuing bonds and equity or
seeking foreign partnerships to increase their capital base. Digital services are gaining traction among the large proportion of the
population which is unbanked and green lending is on the rise.
• The strong rebound in Vietnam's 2022 real GDP growth, estimated at 8.0% (up from our previous forecast of 6.6%) will support
annual bank loan growth of 15.0% by our estimates. However, loan growth in excess of nominal GDP growth (estimated at
10.4%) implies a further increase in national indebtedness.
• In January 2022, a report from cloud banking platform Mambu revealed that in Vietnam, 70% and 54% of consumers have made
greater use of digital banking services because of the pandemic. These numbers are higher than the global average (61% and
41% respectively). In November 2021, the Deputy Governor of the State Bank of Vietnam (SBV) remarked at a conference on
smart banking that around 95% of lenders in Vietnam have been pushing a digital transformation strategy,
• The SBV launched the country’s first debt trading platform on October 15 2021. The platform is operated by Vietnam Asset
Management Company (VAMC), which is an arm of the SBV. VAMC will provide consultation and brokerage services in trading
the debts of individuals and associations, and serve as an intermediary in arranging transactions. By that point in in 2021, VAMC
and other credit institutions had reportedly resolved over VND46trn (USD2bn) in bad debts and recouped more than VND14trn
(USD607mn) from guaranteed bonds.
• Following new regulations issued in September 2021, Vietnam’s banks reduced interest rates for their customers struggling with
repayment obligations resulting from the negative economic impacts of the Covid-19 pandemic. In addition, banks have
promised to continue lending at preferential rates in order to keep cash flowing to the country’s businesses.
Annual asset growth continues at 13-15%

Total Banking Assets (2020-2031)
e/f = Fitch Solutions estimate/forecast. Source: IMF, Fitch Solutions
Financial Stability Risks Remain Elevated In Vietnam, But Strong

Economic Recovery Should Help Banks
Key View:
• We expect risks to financial stability to remain elevated in Vietnam over the coming quarters.
• The country’s high level of private sector indebtedness, combined with deteriorating asset quality and low levels of capital buffers
among banks, suggest that the banking system is increasingly vulnerable to future shocks.
• Nevertheless, the economy is on a recovery path, and this should be positive for banks’ performance.
At Fitch Solutions, we continue to see elevated risks to financial stability in Vietnam. The country’s private sector debt
burden is extremely high relative to peers with similar level of development, and has continued to climb even during the pandemic.
Furthermore, underlying asset quality has deteriorated significantly due to the economic slowdown, though headline non-
performing loans (NPLs) figure appear to be holding up. Lastly, low capitalization levels mean that Vietnamese banks have relatively
thin buffers to withstand a prolonged economic shock such as the current Covid-19 Pandemic. Nevertheless, we note that the
operating environment for Vietnamese banks should start improving over the coming year as the economy begins to recover.
Vietnam & Cambodia Stand Out As Having Low Income Relative To Indebtedness
Top 20 Most Indebted Economies (2020) - Domestic Credit To Private Sector, % Of GDP (X-Axis) Versus GDP Per Capita, USD (Y-Axis)
Source: World Bank, Fitch Solutions
Vietnam’s private sector indebtedness is among the highest in the world, particularly for its low level of GDP per capita which stood
at around USD2,900 at end-2021. According to the World Bank, Vietnam’s domestic credit to private sector amounted to 147.7% of
GDP in 2020, ranking 12th in the world and even above the UK which is about 14 times wealthier in GDP per capita terms. In 2021,
we estimate that this figure has increased further as nominal GDP expanded by about 4.5%, while credit grew by an estimated 14%.
We expect Vietnam’s indebtedness to further inch up in 2022 as credit growth is expected to further accelerate to 15%, versus our
nominal GDP growth forecast of 10.4%. We note that such high levels of indebtedness is a key risk to financial stability, particularly as
the global monetary environment looks set to tighten over the coming quarters.
Headline NPL Ratio Has Continued To Trend Downwards Despite Pandemic

Vietnam - Non-Performing Loans To Total Gross Loans, %
Source: IMF, Fitch Solutions
Loan Forbearance Obscures True Picture Of Asset Quality
Vietnamese banks’ asset quality appears to be holding up relatively well despite the economic disruption caused by the Covid-19
pandemic, but we note that this is mainly due to regulatory forbearance and strong credit growth. In 2020, the authorities
introduced Circular 01, which allowed banks to not classify restructured loans as NPLs. The regulatory forbearance applied to loans
incurred before June 10, 2020, and is effective from January 23, 2020 until 3 months after the Prime Minister’s announcement of
the ending of COVID-19 pandemic. The government further expanded debt rescheduling for customers on September 7, 2021,
through Circular 14. In particular, the SBV allows banks to restructure debt incurred before 1 August 2021, instead of June 10, 2020,
and debts with repayment obligations from 23 January 2020 to June 30, 2022, instead of the previous revised deadline of December
31, 2021 under Circular 3.
Based on data from IMF, Vietnam’s NPL ratio stood at 1.87% at end-June 2021, as compared with 2.00% a year ago, indicating that
asset quality has remained broadly stable despite the pandemic. However, the IMF (in its Article IV 2020) noted that credit
institutions in Vietnam have restructured or rescheduled approximately 3.9% of total outstanding loans between March and early-
November 2020, while about 10.8% of outstanding loans had their interest payments exempted or reduced. Furthermore,
according to a press release by the State Bank of Vietnam on December 30, although the bad debt ratio on banks’ balance sheet
still maintained at a low level of 1.92% in 2021, the ratio of off-balance sheet bad debt and unresolved debt sold to VAMC is about
3.38%. In a more conservative scenario where all restructured debt is included, the ratio rises to about 7.31%.
Capital Adequacy Is Low And Trending Downwards

Vietnam - Regulatory Capital To Risk-Weighted Assets, %
We believe that thin capitalization levels among Vietnamese banks leaves the banking system vulnerable to
economic shocks and pose serious downside risks to financial stability. As of June 2021, the banking sector’s regulatory
capital to risk weighted assets ratio stood at 11.0% according to IMF data, slightly above the minimum regulatory capital adequacy
requirement of 9% prescribed under Circular 22. However, we note that many banks have yet to adopt Basel II, after authorities
extended the timeline for adoption to January 1, 2023 from 2020 previously. This limits the comparability of reported capital
adequacy ratios (CARs) against other markets. According to the IMF, only 18 out of 43 banks (accounting for 60% of total banking
system’s assets) met the capital standards required for Basel II adoption as of December 2019. As more banks gradually adopt the
more stringent Basel II and increase its base of risk-weighted assets, we believe that this will likely lead to a further decline in
reported CARs.
Strong Growth Rebound Should Provide Respite For Banks
Nevertheless, the economy is on a recovery path and we expect the operating environment for banks to improve in 2022. Despite
early signs that the Omicron variant is spreading within the community, our core view remains that Vietnam will continue to
normalize economic activities over the coming months, which will allow real GDP growth to rebound to 7.0% in 2022, from 2.6% in
2021. Vaccination coverage has improved significantly over the last few months, and the country now boasts an inoculation rate of
around 74% as of February 12, from around 10% previously at the end of September 2021. Combined with the fact that the
Omicron variant is less virulent, this should allow the government to soften its approach to future outbreaks, suggesting that the
economic recovery should be more resilient to the threat of Covid-19 in 2022.
Forecast Tables
ASSETS FORECASTS (VIETNAM 2020-2025)
Indicator 2020 2021e 2022f 2023f 2024f 2025f
Total assets, VNDmn 12,061,660,232 13,750,292,665 15,812,836,564 17,947,569,501 20,370,491,383 23,120,507,720
Total assets, USDmn 521,450 604,142 693,545 780,329 876,904 985,432
Total assets, % of GDP 191.6 209.1 217.9 224.1 231.3 238.5
Total assets, % y-o-y 12.1 14.0 15.0 13.5 13.5 13.5
Client loans, VNDmn 9,564,760,159 10,903,826,581 12,539,400,568 14,232,219,645 16,153,569,297 18,334,301,153
Client loans, USDmn 413,503 479,078 549,973 618,792 695,375 781,436
Client loans, % of GDP 152.0 165.8 172.8 177.7 183.4 189.1
Client loans, % y-o-y 12.1 14.0 15.0 13.5 13.5 13.5
Client loans, USD per capita 4,248 4,880 5,557 6,206 6,925 7,728
Client loans, % of total assets 79.3 79.3 79.3 79.3 79.3 79.3
ASSETS FORECASTS (VIETNAM 2026-2031)
Indicator 2026f 2027f 2028f 2029f 2030f 2031f
Total assets, VNDmn 26,241,776,263 29,784,416,058 33,805,312,226 38,369,029,377 43,548,848,342 49,427,942,869
Total assets, USDmn 1,107,391 1,244,445 1,398,460 1,571,537 1,766,034 1,984,603
Total assets, % of GDP 246.6 255.3 264.2 273.4 283.2 292.8
Total assets, % y-o-y 13.5 13.5 13.5 13.5 13.5 13.5
Client loans, VNDmn 20,809,431,808 23,618,705,102 26,807,230,291 30,426,206,381 34,533,744,242 39,195,799,715
Client loans, USDmn 878,149 986,830 1,108,963 1,246,211 1,400,445 1,573,767
Client loans, % of GDP 195.6 202.5 209.5 216.8 224.6 232.2
Client loans, % y-o-y 13.5 13.5 13.5 13.5 13.5 13.5
Client loans, USD per capita 8,628 9,634 10,762 12,026 13,444 15,036
Client loans, % of total assets 79.3 79.3 79.3 79.3 79.3 79.3
LIABILITIES FORECASTS (VIETNAM 2020-2025)
Indicator 2020 2021e 2022f 2023f 2024f 2025f
Total liabilities and capital,

12,061,660,232 13,750,292,665 15,812,836,564 17,947,569,501 20,370,491,383 23,120,507,720
VNDmn

521,450 604,142 693,545 780,329 876,904 985,432
USDmn
Total liabilities and capital, % of

191.6 209.1 217.9 224.1 231.3 238.5
GDP
Total liabilities and capital, % y-

12.1 14.0 15.0 13.5 13.5 13.5
o-y
Client deposits, VNDmn 9,543,178,227 10,688,359,614 11,970,962,768 13,407,478,300 15,016,375,696 16,818,340,780
Client deposits, USDmn 412,570 469,611 525,042 582,933 646,421 716,824
Client deposits, % of GDP 151.6 162.6 164.9 167.4 170.5 173.5
Client deposits, % y-o-y 12.0 12.0 12.0 12.0 12.0 12.0

Indicator 2020 2021e 2022f 2023f 2024f 2025f
Client deposits, USD per capita 4,238 4,783 5,305 5,846 6,437 7,089
Client deposits, % of total

79.1 77.7 75.7 74.7 73.7 72.7
liabilities
LIABILITIES FORECASTS (VIETNAM 2026-2031)

26,241,776,263 29,784,416,058 33,805,312,226 38,369,029,377 43,548,848,342 49,427,942,869
VNDmn

1,107,391 1,244,445 1,398,460 1,571,537 1,766,034 1,984,603
USDmn
Total liabilities and capital, % of

246.6 255.3 264.2 273.4 283.2 292.8
GDP
Total liabilities and capital, % y-

13.5 13.5 13.5 13.5 13.5 13.5
o-y
Client deposits, VNDmn 18,836,541,674 21,096,926,675 23,628,557,876 26,463,984,821 29,639,662,999 33,196,422,559
Client deposits, USDmn 794,893 881,466 977,467 1,083,924 1,201,976 1,332,884
Client deposits, % of GDP 177.0 180.8 184.7 188.5 192.8 196.6
Client deposits, % y-o-y 12.0 12.0 12.0 12.0 12.0 12.0
Client deposits, USD per capita 7,810 8,605 9,485 10,460 11,539 12,735
Client deposits, % of total

71.8 70.8 69.9 69.0 68.1 67.2
liabilities
KEY RATIOS FORECASTS (VIETNAM 2020-2031)
Indicator 2020 2021e 2022f 2023f 2024f 2025f 2026f 2027f 2028f 2029f 2030f 2031f
Loan/deposit ratio 100.23 102.02 104.75 106.15 107.57 109.01 110.47 111.95 113.45 114.97 116.51 118.07
Loan/asset ratio 79.30 79.30 79.30 79.30 79.30 79.30 79.30 79.30 79.30 79.30 79.30 79.30
Competitive Landscape
The Vietnamese banking industry consists of a variety of players, from relatively large state-owned and joint-stock commercial
banks to small, privately-held banks. The top 10 banks account for 64% of the sector's total assets, with the top four banks holding
42% of the asset base.
The Bank of Vietnam (SBV), which oversees the banking sector, lists four state-owned commercial banks, 31 joint-stock commercial
banks, nine wholly foreign-owned banks, two policy banks and one cooperative bank.
Latest Developments
• In January 2022, US bank Citi announced the sale of its consumer banking franchises in four South East Asian countries,
including Vietnam, to UOB Group. The agreement includes all related Citi staff and an estimated 5,000 consumer bank and
supporting employees are expected to transfer to UOB. The deal is part of Citi’s wider exit from its consumer franchises in 13
markets across Asia and EMEA.
• In January 2022, US holding company Vemanti Group announced that it had signed a Letter of Intent with Vietnam Public
Joint-stock Commercial Bank to become one of the first SME neobanking solutions in Vietnam. This is a step towards an
integrated bilateral formal partnership for the two groups following the announcement of an MoU to create joint financial
projects in Q321.
• Vietnam Prosperity Joint Stock Commercial Bank (VPBank) completed the sale of its 49% stake in VPBank Finance
Company (FE Credit) to SMBC Consumer Finance, a wholly-owned subsidiary of Japan-based Sumitomo Mitsui Financial
Group. VPBank will retain a 50% stake in FE Credit, while the remaining 1% is held by another investor.
• The Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) and MobiFone
Telecommunications Corporation (MobiFone) signed a comprehensive cooperation agreement over the next five years
(ending in 2026) to promote digital banking services for their customers.
• Japan-based lender Mitsubishi UFJ Financial Group (MUFG) may consider selling its 19.73% interest in Vietnam Joint Stock
Commercial Bank for Industry and Trade (Vietinbank). MUFG is seeking to speed up its efforts at digitalisation and recently
sold its US retail banking operations.
TOP 10 COMMERCIAL AND RETAIL BANKS BY TOTAL ASSETS, VNDMN
Total Common
Total Assets Date
Equity
Joint Stock Commercial Bank for Investment and Development of

1,761,939,000 86,366,600 12/31/2021
Vietnam
Vietnam Bank for Agriculture and Rural Development 1,622,749,649 76,520,621 6/30/2021
Vietnam Joint Stock Commercial Bank for Industry and Trade 1,531,468,300 93,653,100 12/31/2021
Joint Stock Commercial Bank For Foreign Trade of Vietnam 1,414,765,500 111,170,700 12/31/2021
Saigon Joint Stock Commercial Bank 673,276,150 22,063,217 9/30/2021
Military Commercial Joint Stock Bank 607,140,419 62,486,023 12/31/2021
Vietnam Prosperity Joint Stock Commercial Bank 547,626,129 86,451,499 12/31/2021
Asia Commercial Joint Stock Bank 527,769,900 44,900,900 12/31/2021
Saigon Thuong Tin Commercial Joint Stock Bank 521,196,300 34,261,300 12/31/2021
Saigon - Hanoi Commercial Joint Stock Bank 506,556,379 35,676,130 12/31/2021
Note: Data is latest available. Source: Company reports, Fitch Solutions
BIDV and Vietnam Bank for Agriculture and Rural Development (AgriBank) have recently vied for the top two spots in the
rankings. Vietinbank and Joint Stock Commercial Bank For Foreign Trade of Vietnam (Vietcombank) generally rank third and
fourth. The top ranked banks have relatively low non-performing loan ratios which could rise in the near term due to lingering
effects of the Covid-19 pandemic.
BIDV was founded in 1957 as the Bank of Construction for Vietnam but changed its name in 1990. It is primarily state-owned lender
following the government selling a stake in 2012. Beyond traditional banking, BIDV also provides services in insurance, securities
and investments. It operates 190 branches and 855 transaction offices nationwide, with a presence in six countries. The customer
base of BIDV exceeds 7.7mn, representing over 8% of Vietnam's population. In 2019, South Korea's KEB Hana acquired a 15% stake
in BIDV, making it the second largest shareholder.
Founded in 1988, AgriBank is Vietnam's only 100% state-owned commercial bank. It offers insurance and brokerage services in
addition to banking. It has a network of more than 2,300 branches and transaction offices across the country. Agribank focuses on
Vietnam's agricultural and rural areas and has a branch in Cambodia. The government plans to launch an initial public offering for
the bank, converting it into a joint stock bank, but this has not yet occurred.
TOP 10 BANKS - ASSET QUALITY
Reserves for NPL Charges

Growth of Gross
NPL Ratio (%) NPLs (% of (% of gross Date
Loans (%)
NPLs) loans)
Joint Stock Commercial Bank for Investment and

11.6 1.0 219.4 2.3 12/31/2021
Development of Vietnam
Vietnam Bank for Agriculture and Rural

1.6 2.0 133.5 2.1 6/30/2021
Development
Vietnam Joint Stock Commercial Bank for Industry

11.4 1.3 180.4 1.2 12/31/2021
and Trade
Joint Stock Commercial Bank For Foreign Trade of

14.4 0.6 424.4 0.7 12/31/2021
Vietnam
Saigon Joint Stock Commercial Bank 0.4 na na 2.5 9/30/2021
Military Commercial Joint Stock Bank 21.9 0.9 268.0 1.6 12/31/2021
Vietnam Prosperity Joint Stock Commercial Bank 22.2 4.5 60.9 5.0 12/31/2021
Asia Commercial Joint Stock Bank 16.2 0.8 209.4 1.0 12/31/2021
Saigon Thuong Tin Commercial Joint Stock Bank 14.0 1.5 120.9 1.0 12/31/2021
Saigon - Hanoi Commercial Joint Stock Bank 18.6 1.4 96.0 2.3 12/31/2021
Note: Data is latest available. na = not available/applicable. Source: Company reports, Fitch Solutions
Vietinbank is the third largest lender in Vietnam and was established in 1988 after being separated from the State Bank of Vietnam
(SBV), which maintains a majority stake of around 65%. The bank also has two foreign shareholders, the Bank of Tokyo-
Mitsubishi UFJ and International Finance Corporation, with the latter recently reducing its stake from around 8% to 5%.
Vietinbank has 155 branches and more than 950 transaction offices nationwide. The bank is also expanding its international
presence, with branches in Frankfurt and Berlin (Germany), a representative office in Myanmar and a subsidiary in Laos. It also has a
correspondent relationship with 1,000 banks in 90 countries worldwide.
TOP 10 BANKS - EARNINGS AND PROFITABILITY

Operating
Net Interest Expenses (% Net Income
Profit (% of
Income (% of of gross (% of average Date
average
earning assets) revenues) equity)
assets)

3.0 31.1 0.8 13.0 12/31/2021
Vietnam Bank for Agriculture and Rural

3.8 34.5 1.3 21.7 6/30/2021
Development
Vietnam Joint Stock Commercial Bank for Industry

3.1 32.7 1.2 15.5 12/31/2021
and Trade
Joint Stock Commercial Bank For Foreign Trade of

3.3 32.6 2.0 21.1 12/31/2021
Vietnam
Saigon Joint Stock Commercial Bank 2.0 33.0 0.2 4.6 9/30/2021
Military Commercial Joint Stock Bank 5.0 36.1 3.1 23.5 12/31/2021
Vietnam Prosperity Joint Stock Commercial Bank 8.1 26.1 3.1 18.3 12/31/2021
Asia Commercial Joint Stock Bank 4.3 35.5 2.5 23.9 12/31/2021
Saigon Thuong Tin Commercial Joint Stock Bank 2.7 56.3 0.9 10.9 12/31/2021
Saigon - Hanoi Commercial Joint Stock Bank 3.9 24.3 1.4 17.7 12/31/2021
Vietcombank, established in 1963, is the oldest commercial bank for external affairs in Vietnam. It was the first bank in the country
to have a centralised capital management structure and was the first commercial bank in the country to deal in foreign currencies.
Vietcombank has been listed on the Ho Chi Minh stock exchange since 2009, though the SBV retains a 74.8% stake. Japan's
Mizuho Corporate Bank acquired a 15.0% holding in January 2012 and has maintained that share. Singapore's GIC owns a 2.5%
share.
The bank has more than 15,000 employees and over 550 branches and transaction offices across the country with a number of
subsidiaries offering non-banking financial services. Vietcombank has a banking subsidiary in Laos and several joint ventures. The
bank has expanded its presence beyond the region, opening a branch in Australia and a representative office in the US.
TOP 10 BANKS - CAPITAL AND LEVERAGE
Tangible Common Net Income Minus

Equity (% of tangible Cash Dividends (% Date
assets) of total equity)
Joint Stock Commercial Bank for Investment and Development of

4.7 13.7 12/31/2021
Vietnam
Vietnam Bank for Agriculture and Rural Development 4.6 22.2 6/30/2021
Vietnam Joint Stock Commercial Bank for Industry and Trade 5.9 16.7 12/31/2021
Joint Stock Commercial Bank For Foreign Trade of Vietnam 7.7 23.3 12/31/2021
Saigon Joint Stock Commercial Bank 3.0 5.4 9/30/2021
Tangible Common Net Income Minus

Equity (% of tangible Cash Dividends (% Date
assets) of total equity)
Military Commercial Joint Stock Bank 10.1 26.4 12/31/2021
Vietnam Prosperity Joint Stock Commercial Bank 15.7 22.1 12/31/2021
Asia Commercial Joint Stock Bank 8.3 27.1 12/31/2021
Saigon Thuong Tin Commercial Joint Stock Bank 5.8 11.8 12/31/2021
Saigon - Hanoi Commercial Joint Stock Bank 6.2 20.7 12/31/2021
Saigon Joint Stock Commercial Bank (SCB) was established in 1992 and is the country's fifth largest bank in terms of assets. It
is much smaller than fourth-ranked Vietcombank, having just over 5% of the country’s total banking assets. SCB focuses on retail
and commercial banking services but also engages in asset management, gold trading, bond dealing, and insurance, the latter via a
tie-up with Manulife. Its network includes 50 branches and 189 transaction offices across the country and it has more than 7,700
employees. SCB has two subsidiaries in hotel and travel services and another in credit information services.
TOP 10 BANKS - FUNDING AND LIQUIDITY
Interbank
Loans (% of Customer
Assets (% of
customer Deposits (% of Date
interbank
deposits) total funding)
liabilities)

98.1 230.6 84.1 12/31/2021
Vietnam Bank for Agriculture and Rural Development 84.3 5,119.3 96.9 6/30/2021
Vietnam Joint Stock Commercial Bank for Industry and

97.3 443.3 82.9 12/31/2021
Trade
Joint Stock Commercial Bank For Foreign Trade of Vietnam 84.6 216.6 89.3 12/31/2021
Saigon Joint Stock Commercial Bank 72.2 99.6 77.6 9/30/2021
Military Commercial Joint Stock Bank 94.5 259.4 74.9 12/31/2021
Vietnam Prosperity Joint Stock Commercial Bank 146.9 121.2 54.2 12/31/2021
Asia Commercial Joint Stock Bank 95.3 120.4 81.7 12/31/2021
Saigon Thuong Tin Commercial Joint Stock Bank 90.8 90.9 92.0 12/31/2021
Saigon - Hanoi Commercial Joint Stock Bank 110.7 86.3 71.2 12/31/2021
Regulatory Environment
The State Bank of Vietnam (SBV) is the central bank and oversees all banking and credit institutions in Vietnam. The SBV is not a
wholly independent central bank, despite passage of the State Bank Law in 2010 which nominally expanded its independence.
Some key areas of operation, such as the provision of liquidity support, monetary policy, the management of foreign currency
reserves, foreign exchange rates and issuance of banking licenses, are subject to legislative approval or consultation.
To provide support during the Covid-19 crisis, the SBV allowed banks to reschedule or reduce fees and interest rates to encourage
payment. Customers were permitted to restructure repayments over 12 months and would not lose their debt classification status
prior to the restructuring agreement. In September 2021, the central bank announced the following additional support measures:
• Financial institutions were allowed to reschedule debts incurred before August 1 2020, versus June 10 2020, previously.
• The date for debts with repayment obligations was extended to run through June 30 2022, instead of the prior deadline of
December 31 2020.
• Repayment terms for customers were lengthened to June 20 2022 while the time limit for overdue debts incurred was extended
to include those incurred through September 7 2021.
• Credit institutions and foreign bank branches were permitted to determine the level of fees and interest rates for debts incurred
before August 1 2021 with repayment obligation between January 23 2020 and June 30 2022, and for customers unable to
repay debts due to the pandemic.
In August 2018, the government issued its long-term plan for the industry, via the 'Development Strategy for the Banking Sector to
2025, with Orientations to 2030'. The strategy includes plans to make the SBV more autonomous, independent and accountable,
while also increasing the effectiveness of its supervision. It also includes the gradual adoption of Basel II standards by local banks,
the diversification of bank ownership structures, a goal to have several leading entities included among the top 100 banks in Asia
(by assets) by 2025. In addition, there are plans to develop the micro-financing sub-sector and promoting the development of non-
cash payments in Vietnam. The strategy will be supported by the World Bank and Swiss government under the ‘Vietnam:
Strengthening Banking Sector Soundness and Development Project’.
The primary legislation governing the banking sector is the 2010 Law on Credit Institutions, which was later amended in 2018. The
newer amendments focused primarily on establishing a framework for the restructuring, rescue and liquidation of a credit
institution. It also clamped down on cross-ownership of credit institutions. More specific rules and requirements are predominately
outlined in government decrees or circulars, with some of the main examples listed in the table below.
Insurance
Insurance Snapshot
Key View: Vietnam's insurance market has enormous growth potential given the country's large population and the fact it only
accounts for about 3.3% of GDP. The life insurance sector is dominant, and will continue to be so while health/personal accident
and motor insurance are the segments likely to provide the largest gains in the non-life sector. Bancassurance partnerships are
currently the primary channel for life insurance distribution. However, the emergence of new insurtech platforms will make it easy
for first-time customers to buy insurance and encourage innovations in the types of coverage that individuals and businesses can
afford.
Both segments set for long term growth around 11% p.a.
Insurance Premiums By Sector (2020-2031)
e/f = Fitch Solutions estimate/forecast. Source: National Sources, Fitch Solutions
• The government’s new economic restructuring plan for 2021-2025 sets two key goals for the expansion of the country’s
insurance sector. First, it aims that 15% of the population will be covered by life insurance by 2025 versus around 11% in 2020.
Second, premium revenue is targeted at 3.5% of GDP by 2025 – it is expected to be about 3.3% in 2021.
• The insurance sector performed better than expected in 2021 and we have revised up our forecast for premium growth for a
second time. We now expect that the value of total premiums written in 2021 to have increased by 17.4%. For 2022 we expect
total premium growth of 12.9%, with life insurance premiums increasing by 13.0% and the non-life sector by 12.7%.
• We expect the medium-term growth rates for the two sub-sectors to converge. From 2022 to 2026, we forecast an average
annual growth rate in life and non-life premiums of 11.3% and 11.1% respectively. At the end of the period, life premiums will
therefore account for 69% of the total and non-life for 31%, almost identical to the current split.
GROSS INSURANCE PREMIUMS WRITTEN (VIETNAM 2020-2025)

Indicator 2020 2021e 2022f 2023f 2024f 2025f
Total gross premiums written, VNDbn 185,960.00 218,268.71 246,453.06 276,699.48 308,407.97 343,580.07
Total gross premiums written, VND, % y-o-y 16.2 17.4 12.9 12.3 11.5 11.4
Gross life premiums written, VNDbn 129,291.00 149,040.86 168,436.47 189,711.36 212,230.99 237,127.51
Gross life premiums written, VND, % y-o-y 21.2 15.3 13.0 12.6 11.9 11.7
Gross non-life premiums written, VNDbn 56,669.00 69,227.85 78,016.60 86,988.11 96,176.98 106,452.56
Gross non-life premiums written, VND, % y-o-y 6.2 22.2 12.7 11.5 10.6 10.7
e/f = Fitch Solutions estimate/forecast. Source: National sources, Fitch Solutions
GROSS INSURANCE PREMIUMS WRITTEN (VIETNAM 2026-2031)
Total gross premiums written, VNDbn 380,934.19 421,322.66 465,717.31 514,586.35 567,334.99 626,660.02
Total gross premiums written, VND, % y-o-y 10.9 10.6 10.5 10.5 10.3 10.5
Gross life premiums written, VNDbn 263,509.91 291,992.27 323,258.55 357,643.14 394,724.89 436,415.09
Gross life premiums written, VND, % y-o-y 11.1 10.8 10.7 10.6 10.4 10.6
Gross non-life premiums written, VNDbn 117,424.29 129,330.39 142,458.77 156,943.21 172,610.10 190,244.93
Gross non-life premiums written, VND, % y-o-y 10.3 10.1 10.2 10.2 10.0 10.2
f = Fitch Solutions forecast. Source: National sources, Fitch Solutions
The Ministry of Finance reported that at December 2021, Vietnam's insurance market had 77 participants. There were 31 non-life
insurers, 19 life insurers, two reinsurance businesses and 24 brokerages and one branch of a foreign non-life insurer.
Latest Developments
• The Ministry of Finance is reportedly considering divestments of BMI and VNR in Q122. Both companies are currently managed
by the State Capital and Investment Corporation. According to the report, the value of State capital at par value at BMI is
VND463.1bn (USD20.4mn) and VND529bn (USD23.3mn) at VNR.
• In December 2021, UK composite insurer Aviva completed the sale its Vietnam life insurance business to
Canada’s Manulife as a part of Aviva’s strategy of focusing on core markets in the UK, Ireland and Canada. Manulife noted
separately that it had agreed a 15-year bancassurance partnership with Vietinbank: the purchase of Aviva’s business is a part of
that deal.
• Japan’s Hitachi Ltd signed a deal with Bảo Việt Insurance aiming to incorporate digital technologies such as AI and big data
analysis into Bảo Việt’s medical insurance business, which has over 1mn policyholders. The enhanced capabilities would allow
users of the Bảo Việt Direct app to assess their risk of developing lifestyle-related diseases and receive health advice. The service
was launched on October 1 2021
• In September 2021, Japan-based Sumitomo Corporation was reported to have invested into Insmart, an insurtech joint
venture between Vietnamese and Malaysian shareholders. According to the Vietnam Investment Review, Insmart controls 60%
of the managed-care market in Vietnam.
Life Insurance
Life insurance dominates Vietnam's insurance sector and is likely to account for 68.5% of the value of total underwriting in 2021.
The sector performed very well during the pandemic, with the total value of life premiums written increasing by 21.2%. This year, we
expect strong growth of 13.3% followed by average annual growth of 12.9% per annum through to 2025.
Other than Bảo Việt Life Insurance, which is the country's largest life insurer, the segment is dominated by multinational insurers.
The top five providers account for nearly 80% of the domestic market. Partnering with banks to offer bancassurance products has
been a profitable strategy for the international firms and will likely remain so. With few Vietnamese companies in the top ranks of the
life market, the global players are likely to dominate the sector for the foreseeable future.
Bảo Việt Life Insurance had a 21.7% market share in 2020. It is a former state monopoly and is Vietnamese-owned. The rest of the
top 10 insurers are major global players. Number two Manulife is actively expanding its business, having agreed a bancassurance
deal with VietinBank as well as acquiring the Vietnamese business interests of Aviva at the end of 2020.
Both Prudential and Daiichi have partnerships with local banks to offer their products. FWD, which is not among the top ten
insurers, has a 15-year tie-with Vietcombank, one of the country's big four banks.
Non-life Insurance
Vietnam's non-life segment is about half the size of the life market. In 2020, the growth in non-life premiums was just 6.2%, a
marked decrease from the 2019 pace of 13.7%. As in the case of the life sector, non-life underwriting has rebounded significantly in
2021 with growth of 18.7% forecast for this year. Regulatory changes being considered in the National Assembly will likely expand
compulsory cover in several non-life sub-markets, lending upside potential to growth beyond 2023. Through to 2025, we current
project average annual growth of 12.0% per annum.
There are 32 insurers in the non-life segment and, unlike the life sector, it is dominated by local Vietnamese companies that have
close links with state-owned enterprises and handle industrial risks for their parent companies. Most of the non-life insurers lack
scale, even though some are affiliates of regional and/or global insurers who view their Vietnamese operations in the context of a
larger entity. The five largest companies account for 55% of non-life underwriting. After the sixth largest insurer (MIC), the market is
very fragmented, with no company holding a 5% market share.
Bảo Việt is a former state monopoly and is Vietnamese owned and has 17.3% of the non-life market. It is also the largest provider of
life insurance in the country.
Number two PetroVietnam Insurance has a 13.2% market share. It is majority owned by PetroVietnam. Germany’s Talanx group
has a holding in PVI via HBI.
PTI (Post and Telecommunication Joint Stock Insurance Corporation) is Vietnam’s third largest non-life insurer with a 10.6% share. It
was founded on August 1,1998 and has three major shareholders: South Korea-based Dongbu Insurance (37.32%), Vietnam Post
Corporation (22%) and Vndirect Securities Corporation (22%). PTI offers individual and business customers a range of over 100
products within four main categories: motor vehicle, personal, property & engineer and marine.
Bảo Minh Insurance was founded on November 28,1994 and provides a range of non-life coverage including health and
accident, motor vehicle, property and engineering, liability, marine, aviation, and agriculture. It has 7.7% of the non-life market.
The last of the top five insurers is PJICO with a 6.3% share of the non-life market. It is majority owned by Vietnamese industrial
group Petrolimex. South Korea’s Samsung Fire and Marine Insurance holds a stake in the company.
Health and Motor dominate non-life premiums

Non-Life Premiums Written By Sub-Sector, USDmn (2022-2022)
Source: AVI, Fitch Solutions
Health and personal accident premiums along with motor vehicle insurance are currently the dominant forms of non-life insurance
and are expected to provide the most upside potential during our forecast time frame.
Motor vehicle insurance accounts for about 35% of non-life premiums written, versus over 40% for health/personal accident. Rising
incomes should support strong growth in vehicle sales for the foreseeable future, resulting in average annual growth of 9.8% per
annum through to 2025.
Property insurance is the third-largest non-life market at around 13% of non-life premiums written and is an area where amended
regulations might increase growth potential beginning in 2023. Coverage for fire and explosions is compulsory and provides a
springboard for the marketing of non-mandatory comprehensive policies. Through to 2025, we forecast gains in this segment
averaging 7.5% per annum.
Transport is another significant coverage line of the non-life market, accounting for about 7.5% of non-life premiums written. The
Covid-19 pandemic constrained long-haul travel so this sector experienced a 31.5% decline in premiums in 2020. After rebounding
with growth of 32.9% this year, we expect average annual growth of 9.5% per annum through 2025.
TOP 10 LIFE INSURANCE COMPANIES BY GROSS PREMIUMS, USDMN

2015 2016 2017 2018 2019 2020
Bảo Việt 466.8 613.5 781.0 951.6 1,104.2 1,208.1
Prudential 516.1 616.9 724.7 850.9 963.4 1,083.3
Manulife 207.8 279.1 363.3 486.8 654.3 862.1
Daiichi 163.1 241.7 360.0 508.9 566.3 672.8
AIA 161.7 214.5 281.4 375.7 496.4 620.7
Chubb 76.6 94.6 116.0 133.6 152.9 179.3
Generali 35.3 60.7 87.4 101.4 116.0 162.6
MB Ageas 0.0 n.a. 1.1 56.2 99.2 148.5
Hanwha 33.3 48.7 68.6 94.8 123.7 145.4
Aviva 19.6 32.4 43.4 64.5 96.6 132.2
na = not available. Source: AVI, Fitch Solutions
TOP 10 NON-LIFE INSURANCE COMPANIES BY GROSS PREMIUMS, USDMN

2015 2016 2017 2018 2019 2020
Bảo hiểm Bảo Việt 268.6 299.3 359.9 435.9 446.7 417.6
Bảo hiểm PVI 297.6 297.6 299.0 304.1 316.6 318.9
PTI 113.5 141.2 143.3 184.0 247.0 256.8
Bảo Minh 130.0 141.4 151.8 157.0 168.1 185.1
PJICO 102.8 113.3 116.7 124.3 133.0 151.2
MIC 64.6 79.3 85.9 85.2 108.7 136.0
BIC 71.5 76.1 82.4 91.7 101.2 114.6
BSH 17.1 21.0 27.0 38.9 64.5 102.9
VBI 22.4 31.5 39.8 65.3 82.1 89.2
ABIC 36.2 49.5 55.2 62.5 75.6 82.1
Source: AVI, Fitch Solutions
The Ministry of Finance is the main regulator for the insurance sector in Vietnam via its Insurance Supervisory Authority unit. The
main legislation regulating insurance activities in Vietnam is the Law on Insurance Business of 2000 (LOIB), which was subsequently
amended in 2010 and 2019. It is currently undergoing another update which is expected to come into force in 2023.
In October 2021, the National Assembly was considering a second draft of amendments to the LOIB. The revisions to the law are
likely to come into force in 2023.
The 2019 amendment to the LOIB expanded the scope of regulation to include services auxiliary to insurance so that Vietnam
would be in compliance with its commitments under the Comprehensive and Progressive Agreement for Trans-Pacific
Partnership. These services include consultancy, risk assessment, actuarial services, loss assessment and indemnity settlement
support.
The 2019 amendment also led the government to pursue a plan for restructuring the insurance market which extends through
2025. There is an annual growth target rate of 15% between 2020 and 2025 which would raise the number of people taking out life
insurance policies to reach 15% of the total population by 2025, up from an estimated 11% in 2020. Implementing the plan
requires further reform of the LOIB which, in August 2021, was still on the work agenda of the Ministry of Finance.
Asset Management
Asset Management Snapshot
Key View: Vietnam does not have many institutional investors which, in other countries, are the backbone of the asset
management industry. In 2021, we estimate that only 9% of Vietnamese households have an average disposable income over
USD10,000, the point at which asset management services targeted at individuals becomes attractive and viable. By 2025, however,
that proportion will rise to 17%, providing strong potential for the expansion of the asset management sector in Vietnam.
• As of December 31 2021, the State Securities Commission (SSC) listed 70 securities investment funds which were licensed to
invest in the stock market, an increase of 14 over the year. Those funds are managed by 43 active fund management
companies.
• The SSC said that the total value of assets under the management of fund management companies in Vietnam
reached approximately VND570.0trn (USD24.7bn) as of December 31 2021. This represents a 31% y-o-y growth rate. The
regulator reported that from 2015 to the end of 2021, AUM grew by an average of 15-25% per annum.
• In February 2022, deputy director of the Fund Management Department of the SSC said that the AUM of Vietnam's fund
management companies accounted for only 5.5 per cent of the country's GDP, a modest figure compared to other countries in
the region such as Thailand (38 %) and Malaysia (50%). He predicted that By 2030, Vietnam's fund management market would
reach 6-10% of GDP.
• Domestic investors in Vietnam reportedly opened 842,405 individual trading accounts between January and August 2021.
Traditionally, property has been the route individuals have taken to accumulate wealth.
Lacking institutional investors, Vietnam's asset management sector focuses on wealthy individuals and seeks investment from
outside the country. There are reportedly some 15,000 millionaires in Vietnam, a figure which is expected to double by 2026. As the
sector gathers momentum, the larger asset management firms with experience in Vietnam, and throughout the rest of Asia, will
have an advantage in expanding their share of the growing market.
Latest Trends and Developments
• In February 2022, the FTSE 250 listed Vietnam Enterprise Investments reported that its NAV rose by 47% in 2021. The
closed-ended fund, which invests in listed equities in Vietnam, saw a 6.5% growth in NAV during Q421. The fund's investment
performance was driven by strong growth in Q1-Q3, with outperformance by small and mid-cap stocks relative to large-cap
companies resulting in an underperformance versus its benchmark in the final three months of 2021.
• In December 2021, HSBC Bank (Vietnam) confirmed a strategic cooperation with VinaCapital Fund Management, one of
Vietnam’s leading investment management companies, to connect retail investors with VinaCapital’s mutual funds. The
cooperation, initially supporting HSBC Premier customers, opens up more opportunities to investment products in Vietnam for
HSBC customers.
• Mekong Capital announced in July 2021 that its Mekong Enterprise Fund IV completed a USD246mn investment in consumer
healthcare product company LiveSpo Global and cosmetic retailer HSV Group. In June, the firm pledged USD10mn to Mutosi
Group, a manufacturer and distributor of water purifiers and electrical appliances.
• Private equity fund Excelsior Capital announced in June 2021 that it placed its first investment in health and beauty retail chain
Hasaki with a plan to close another 2-3 deals in 2021.
Despite the relatively small size of the market, there is a wide range of domestic investment opportunities on offer. These include
private equity funds, mutual funds, ETFs and a range of products for various types of asset allocation strategies. Although there is no
official ranking of asset management firms in Vietnam, we list some of the most prominent below.
Eastspring Vietnam, which is affiliated with insurer Prudential Vietnam, is one of the biggest government bond traders in
Vietnam. It has assisted the State Securities Corporation in bringing 15-year, 20-year and 30-year bonds to market.
Dragon Capital was established in 1994 with USD16.0mn and is one of the oldest independent asset managment firms in the
country. It owns Vietfund Management, a joint venture with Sacombank. Dragon reported USD5.5bn in AuM in June 2021. Located
in the UK, Dragon Capital Markets Europe is the group's subsidiary for the region, and is regulated by the Financial Conduct
Authority, while the group also has offices in Thailand and Hong Kong.
VinaCapital is another leading local fund management company, established in 2003 and reports total AuM of USD3.3bn.
Traditionally, the company has had a heavy focus on real estate, though now it covers the full range of traditional and alternative
asset classes, including listed equity, private equity, venture capital and fixed income. It manages two closed-end funds trading
on the London Stock Exchange: VinaCapital Vietnam Opportunity Fund Limited and VinaLand Limited.
Mekong Capital is a Vietnam-focused private equity firm. The company invests in five separate funds which are focused on
consumer-driven industries. Established in 2001, Mekong Capital has completed 35 private equity investments, of which 26 have
been fully exited.
Saigon Asset Management is a fund management and investment banking firm domiciled in the Cayman Islands. It had an initial
focus on Vietnam and subsequently expanded into the ASEAN region. The company manages a sizeable open-end fund, Vietnam
Equity Holding (with EUR70mn in assets as at December 2018), which invests in Vietnam-listed equities and is listed on the
Stuttgart Stock Exchange.
The State Securities Commission, which operates within the Ministry of Finance, is the official regulatory body of fund management
companies (FMCs) in the country.
Circular 212, in force as of March 1 2013, stipulates the conditions and procedures for establishing, organising and operating FMCs,
and for the operation of relevant organisations and individuals in Vietnam.
• Having adequate material and technical facilities and office equipment.

• Having qualified management personnel as required in Circular 212.
• Having paid-up charter capital at least equal to the legal capital, which is currently fixed in Decree 58 at VND25bn.
• Having at least two institutional founding shareholders or founding members, at least one of which must be a commercial bank,
insurance company or securities company. If the FMC is a one-member limited company, its owner must be a commercial bank,
insurance company or securities company. If the shareholder is an organisation, that organisation must have been operational
for at least five consecutive years, or two consecutive years if the shareholder is a commercial bank, insurance company or
securities company.
• Furthermore, an institutional shareholder must be profitable in the two consecutive years prior to the year in which it applies to
set up the FMC, and in the year in which the application is filed, the shareholder must have no accumulated loss. If a shareholder
is a commercial bank, insurance company or securities company, it must not be under any special control or suspension of
operations, or under any other warning circumstances.
• The founding institutional shareholders or the founding institutional members of an FMC must subscribe to, or contribute at
least 65% of, the charter capital. The founding shareholders or founding members that are commercial banks, insurance
companies or securities companies must own at least 30% of the charter capital.
Under Circular 212, FMCs are allowed to provide similar services to a securities investment consultancy. These services include
advising clients on investment policies and transactional strategies (such as the allocation of capital, types of investment assets,
method of determining asset value and forms of investment), publishing information on securities investment, and providing the
necessary training programmes on securities investment. To conduct this new business activity, FMCs must sign an investment
consultancy agreement with its clients.
A foreign investor may acquire up to 49% of the charter capital in an existing FMC. However, if certain criteria are met, a new FMC,
wholly-owned by a foreign investor, may be established.
Other Relevant Regulations
• Securities Law (2006, plus amendments).

• Circular No. 183/2011/TT-BTC (plus amendments) on the establishment and management of open-ended funds.
• Circular No. 224/2012/TT-BTC on the establishment and management of closed funds.
• Circular No. 91/2019/TT-BTC amending other circulars with regard the reporting regime and administrative procedures
applicable to FMCs and securities investment companies.
Stock Exchanges
Stock Exchanges Snapshot
Key View: The Vietnamese stock market, which is comprised of three trading entities, is dominated by domestic investors. Foreign
investment remains limited due to the relatively low liquidity of the markets as well as Vietnam's status as a frontier market rather
than an emerging market. In its economic restructuring plan for 2021-2025, the Ministry of Planning and Investment set out goals
for the stock market which are designed to make Vietnam’s stock exchanges competitive with those of other ASEAN nations.
• Vietnam's stock markets made substantial gains in 2021. The benchmark Ho Chi Mihn VN-Index surged by 35.7% (after reaching
an all-time high in November 2021) while the smaller Hanoi HNX-Index climbed 133.3%.
• At February 21 2022, the VN-Index had gained a further 0.8% while the HNX-Index had declined 7.0% year-to-date.
• As part of its economic restructuring plan which extends to 2025, the government has laid out goals for stock market reforms
which will ultimately lead to Vietnam being categorised as an emerging rather than a frontier market. The authorities envision
the size of the stock market expanding to 120% of GDP, from 107% currently, with 5% of the country’s population engaged as
investors, as compared to 3.8% currently. Futures and options contracts will be introduced by 2025 and governance by that
point is expected to be on par with the ASEAN-6.
There are currently two stock exchanges for publicly listed securities in Vietnam, the Ho Chi Minh City Stock Exchange (HOSE) and
the Hanoi Stock Exchange (HNX). HNX operates a third platform, the Unlisted Public Company Market (UpCoM), for public
companies which do not meet the requirements of HOSE and HNX.
The three trading platforms were unified under the umbrella Vietnam Stock Exchange (VNX) in 2021, which is 100% owned by the
Ministry of Finance. VNX announced further reorganisation plans for the entities which will begin implementation in 2022. Under
the new plan, HNX will carry all company and government bond listings by the end of December 2022, including those currently on
HOSE, and will accept no new stock listings after that point. All major stocks will be listed on HOSE. During H125, UpCoM will migrate
all of its listings to HNX.
Latest Trends and Developments
• The HOSE had 404 stock listings as of December 31 2021. At the same date the total market capitalisation had reached
USD254.8bn, a 42% increase on the year.
• The HNX had 343 stock listings on November 4 2021 and a market capitalisation of VND456trn (USD20.1bn)
• During 2021, the HOSE saw a 118.7% increase in the numbers of stocks traded and a 244.5% increase in value compared to
2020.
• The Vietnam Securities Depository reported that in December 2021, domestic investors opened 226,580 new securities
accounts, an increase of more than 6,000 compared to the previous month. In 2021 overall, investors opened 1.5mn new
accounts, mainly of domestic individual investors. The amount is equal to the combined amount over the last four years.
The HOSE began operations in 2000 with just two listed companies. The HOSE currently has 404 listed stocks but only 232 are
included in the VNAllShare Index. Financial and real estate are the dominant sectors with 29% and 21% of the VNAllShare
respectively. Below are the top 10 listed stocks, which account for about 45% of the total market capitalisation.
TOP 10 COMPANIES ON HOSE BY MARKET CAPITALISATION

Company Market Cap (VNDtrn)
Vietcombank 412.7
Vinhomes JSC 347.0
Vingroup JSC 301.1
Joint Stock Commercial Bank 226.1
PetroVietnam Gas JSC 223.9
Hoa Phat Group 210.4
Airports Corp of Vietnam 209.9
Masan Group Corporation 192.8
TCB 181.2
Viet Nam Dairy JSC 168.4
Note: Data as of February 21 2022. Source: HOSE, Fitch Solutions
The HNX, before being renamed in 2009, was known as the Hanoi Securities Trading Center. It opened on July 2005 with six listed
companies.
TOP 10 COMPANIES ON HNX30 BY MARKET CAPITALISATION

National Citizen Commercial JSB 18.0
Saigon-Hanoi Securities 12.3
IDICO Corp 11.7
Thai Holdings 10.3
CEO Group 9.6
LICOGI 14 7.1
Petro Vietnam Technical Services Corporation 6.5
TASCO JSC 5.5
VCS Advanced 3.3
NTP 2.5
Note: Data as of February 21 2022. Source: HNX, Fitch Solutions
UPCoM is the market platform run by HNX for public companies not yet listed. It was launched in June 2009 with 10 companies.
After all shares of publicly-listed companies were mandated to register at the Vietnam Securities Depository, many companies
chose UPCoM for trading. Stocks delisted from HOSE or HNX, or suspended due to losses, are moved to UPCoM for trading.
TOP 10 COMPANIES ON UPCOM BY MARKET CAPITALISATION

Airports Corporation of Vietnam JSC 189.6
Viettel Global Investment JSC 115.4
Masan Consumer Corporation 87.1
Binh Son Refining and Petrochemical JSC 74.7
Vietam Engine and Agricultural Machinery Corporation 55.9
Vietnam Maritiam Corporation 46.1
Vietnam Exhibition Fair Center JSC 40.8
Power Generation JSC 3 35.1
Masan MeatLife Corporation 30.0
Sunshine Homes Development JSC 28.2
Note: Data as of February 21 2022. Source: HNX, Fitch Solutions
The State Securities Commission of Vietnam (SSC), which operates within the Ministry of Finance, is the primary supervisory body of
stock exchanges in Vietnam. The main piece of legislation governing the country's stock exchange is the Securities Law, first
approved in 2006 but then comprehensively updated in 2019.
The new Securities Law, effective in January 2021, included several reforms. It updated definitions for newer products (such as
derivatives and covered warrants) and institutional investors. It also revised listing requirements for initial public offerings (IPOs) and
foreign investor activity.
In response to the Covid-19 crisis and lockdown measures, the SSC confirmed that trading on the securities exchanges would be
considered an essential service, encouraging online trading to comply with social distancing requirements. The SSC issued a new
circular to cut fees applicable to the securities market (including trading and depositary services) by up to 50% from May 7 2020 to
December 31 2020.
The listing conditions on the larger Ho Chi Minh City Stock Exchange (HOSE) are generally tougher than those on the Hanoi Stock
Exchange (HNX). Since HOSE will carry all stock listings after July 2023, presumably its requirements will remain in place.
The conditions for listing shares on HOSE are regulated by Article 53 of Decree 58 and are as follows:
• The shareholding company must, at the time of registration for listing, have paid-up charter capital of VND120.0bn or more,
calculated at book value.
• The company has been in business for at least two years in the form of a shareholding company, calculated up to the time of
registration for listing (except for a state enterprise conducting equitisation associated with listing); the return on equity in the
most recent year must have been a minimum of 5% and the business operation in the last two consecutive years must have
been profitable; no debts payable which are overdue for more than one year; not have accumulated losses calculated to the year
of registration for listing; complies with the provisions of law on accounting and financial statements.
• Any member of the board of management or board of controllers, the director (general director), deputy director (deputy general
director), chief accountant, a major shareholder and affiliated persons must make public disclosure of any debts they owe to the
company.
• At least 20% of the voting shares in the company must be held by at least 300 shareholders who are not major shareholders,
except in the case of a state enterprise converting into a shareholding company in accordance with regulations of the prime
minister. Shareholders being individuals or organisations must commit to hold 100% of the shares they own for six months from
the date of listing and 50% of this number of shares for the following six months.
The conditions for listing shares on HNX are regulated by Article 54 of Decree 58 and are as follows:
• The shareholding company must, at the time of registration for listing, have paid-up charter capital of VND30.0bn or more,
calculated at the value recorded in the accounting books.
• The company has operated for at least one year in the form of a shareholding company, calculated up to the time of registration
for listing (except for a state enterprise conducting equitisation associated with listing); the ROE in the most recent year was a
minimum 5%; does not have debts payable which have been overdue for more than one year; does not have accumulated
losses calculated to the year of registration for listing, and it complies with the provisions of law on accounting and financial
statements.
• At least 15% of the voting shares in the company must be held by at least 100 shareholders who are not major shareholders,
except in the case of a state enterprise converting into a shareholding company in accordance with regulations of the prime
minister.
• Shareholders being individuals or organisations must undertake to hold 100% of the shares they own for six months from the
date of listing and 50% of this number of shares for the following six months, excluding any shares held by such individuals as
representative of the state owner.
Currently, registration for trading by unlisted public companies in UpCom is governed by Article 56 and conditions are as follows:
• Public companies as prescribed in article 25 of the Law on Securities with securities already registered for depository at the
Securities Depository Centre, but not listed on the stock exchange, are permitted to register to trade on the UpCom.
• Any public company making a public offer to sell unlisted securities or securities that do not satisfy all the conditions for listing,
must register to trade the securities on the UpCom in accordance with article 12.1(d) of the Law on Securities.
• The Ministry of Finance shall provide specific regulations on the application file and procedures for registration for trading by
unlisted public companies.
Macroeconomic Overview
Vietnam's Economy To Bounce Back In 2022
Key View
• We forecast Vietnam’s economy to grow 7.0% in 2022, revised down from 8.0% as growth in 2021 proved stronger than
expected resulting in less favourable base effects.
• In Q421, real GDP growth rebounded to 5.2% y-o-y (up from a contraction of 6.2% y-o-y in Q321), which took 2021 full-year
growth to 2.6%.
• We expect base effects and stronger domestic activity to bolster growth in 2022, although we note downside risks from the
Omicron variant and supply-chain issues.
Vietnam’s real GDP growth print of 5.2% y-o-y in Q421 proved that the economy is on the recovery path and we
expect it will continue to expand through 2022. The economy was recovering from its steepest contraction since the
authorities began releasing quarterly data in 2000, as output had fallen 6.2% y-o-y in Q321 due to strict lockdowns in the country’s
key economic hubs of Hanoi and Ho Chi Minh City. While the Covid-19 outbreaks could continue to dampen activity, we believe the
rapid rollout of vaccines and a gradual shift to a softer approach to managing outbreaks suggests the economy will be more
resilient to the threat of Covid-19 in 2022. With favourable base effects and scope for a further normalisation of activity, we believe
growth will run above trend over the coming quarters. That said, given growth outperformed our expectations in 2021, we have
tempered our forecast for growth in 2022 as base effects prove less significant. We now forecast economic growth to pick-up from
2.6% in 2021 to 7.0% in 2022, revised down from 8.0% previously but above the government’s own estimate of 6.0-6.5%.
Growth To Rebound Strongly

Vietnam - Real GDP Growth, %
e/f = Fitch Solutions estimate/forecast. Source: GSO, Fitch Solutions
Growth in Q421 came in above Bloomberg consensus expectations of 3.9%, but was not enough to stop full-year growth from
slowing from 2.9% in 2020 to 2.6% (see chart above). On a sectoral basis, the agriculture, forestry and fishery sector increased by
3.2% y-o-y in Q421, taking full-year growth to 2.9%. Industry and construction increased by 5.6% in Q421, buoyed by the processing
and manufacturing sectors, while mining continued to be a drag. On the services side, activity rebound from its 9.3% y-o-y
contraction in Q321 to growth of 5.4% in Q421. However, for the full-year it was the services sector which continued to drag on
headline growth, averaging 1.2% y-o-y growth. In contrast, industry and construction proved the driver, growing 4.1%. We expect
the services sector to stage a stronger recovery in 2022 given our expectation for receding disruptions from Covid-19 and some
green shoots for the tourism sector in H2. From an expenditure approach, final consumption increased by 2.1% compared to 2020;
fixed investment increased by 4.0%; exports of goods and services increased by 14.0%; and imports increased by 16.2%.
Strong Recovery In Q421

Vietnam - Real GDP Growth, % chg y-o-y
Source: Bloomberg, Fitch Solutions
We expect activity to normalise further over the course of 2022, despite potential disruptions from Covid-19 outbreaks. The
economy is now more resilient to outbreaks following the government’s push to vaccinate the population. As of January 2 2022,
Vietnam had given 79.9% of its population at least one vaccine dose and 57.9% were fully vaccinated, according to Our World In
Data. Reuters reported that the health ministry is also aiming to offer booster jabs to all the adult population in Q122, although we
believe this may take longer given the three-month wait between the second dose and booster dose in Vietnam. Covid-19 cases
have picked up since the easing of restrictions in Q421 but authorities have yet to show signs of imposing new lockdowns. As such,
mobility data shows a gradual recovery in activity in Q421, in line with the GDP print (see chart below).
Improvement In Q421 But Further Scope For Normalisation

Vietnam – Google Mobility Data, % chg from baseline
Source: Google, Fitch Solutions
However, the mobility data suggests further room for a recovery in domestic demand and this should boost services
(42% of GDP pre-pandemic). Retail sales growth remained in contraction in December 2021, coming in at -3.8% y-o-y, albeit
better than -8.7% in November 2021. As more of the population is vaccinated and the population’s concerns about being exposed
to Covid-19 ease, we expect retail activity to bounce back. The major drag on retail sales proved to be consumption of services, with
sales of accommodation, food and beverage services declining 19.3% y-o-y and tourism services down 59.9%. Consumption of
these services should pick up activity in 2022 as restrictions ease and favourable base effects from the Q321 lockdown should also
buoy growth readings in H222.
Retail To Rebound In 2022

Vietnam - Retail sales, % chg y-o-y
Manufacturing activity (17% of GDP pre-pandemic) will also benefit from the normalisation of activity. In the near term,
we highlight potential disruptions to the sector from rising Covid-19 cases and issues around shipping. Industrial production grew
8.7% y-o-y in December, up from growth of 3.6% in November 2021. However, the 12-month moving average continued to decline
from 6.2% y-o-y in November to 6.1% in December. The sector has struggled with employment shortages, as workers continued to
avoid returning to cities and manufacturing hubs due to Covid-19 concerns. With vaccination rates higher we do expect this issue to
ease in 2022, but note that the spread of Omicron could delay the process.
Industrial Activity Eased In H221

Vietnam – Industrial Production, % chg
The December Manufacturing Purchasing Managers’ Index (PMI) reading offered some optimism though, showing a recovery in the
sector. The PMI rose from 52.2 in November to 52.5, marking the third consecutive month of expansion (above 50 indicates an
expansion in output). The December PMI report noted that employment had marked its first increase in six months as workers
returned amid some easing of supply-chain disruptions. As such, while output may be disrupted, there should be some
normalisation as the year goes on.
Construction activity (5.5% of GDP pre-pandemic) should also recover through 2022. The relaxing of domestic restrictions
will prove a boost and we expect some easing of border restrictions to boost foreign direct investment in 2022. We continue to flag
Vietnam as a beneficiary of shifting supply chains, particularly in regards to low value-add manufacturing relocating out of China.
This should boost infrastructure investment activity. We note that elevated input prices, rising energy costs and shipping delays may
hamper activity in early 2022, but across the year our outlook is for commodity prices to ease. Our Commodities team forecasts iron
ore prices to fall 41.9% from their 2021 heights, albeit remaining higher than pre-pandemic levels.
Risks To Outlook
A significant Covid-19 outbreak could force authorities to reimpose some restrictions if the healthcare sector becomes
overwhelmed. With the Omicron variant proving more transmissible and the threat of new variants emerging, we cannot rule out
further disruptions to Vietnam’s economic recovery. Moreover, China’s ‘zero-Covid’ approach could result in supply-chain
disruptions in 2022, particularly if key manufacturing hubs in China are put into lockdown. Vietnamese businesses have complained
about disruptions to trade due to tough border control measures by China and this could intensify if Vietnam or China experiences a
further surge in cases.
Macroeconomic Forecasts
MACROECONOMIC FORECASTS (VIETNAM 2021-2026)
Indicator 2021e 2022f 2023f 2024f 2025f 2026f
Nominal GDP, USDbn 286.7 321.7 348.9 379.9 414.0 449.9
Nominal GDP, EURbn 242.4 282.2 300.7 316.6 336.6 362.8
Real GDP growth, % y-o-y 2.6 7.0 6.5 6.2 6.1 5.8
GDP per capita, USD 2,920 3,251 3,499 3,783 4,094 4,420
GDP per capita, EUR 2,468 2,852 3,016 3,152 3,329 3,564
Population, mn 98.17 98.95 99.70 100.41 101.11 101.78
Consumer price inflation, % y-o-y, ave 1.8 3.4 3.6 3.6 3.7 3.7
Lending rate, %, ave 5.0 5.3 5.5 5.5 5.5 5.5
Central bank policy rate, % eop 4.00 4.25 4.50 4.50 4.50 4.50
Private final consumption, % of GDP 67.6 66.7 67.6 68.4 69.1 69.5
Private final consumption, real growth % y-o-y 1.8 5.5 8.0 7.5 7.2 6.5
Government final consumption, % of GDP 6.8 6.6 6.5 6.4 6.3 6.3
Government final consumption, real growth % y-o-y 5.0 3.0 5.0 5.0 4.8 4.8
Fixed capital formation, % of GDP 25.4 25.6 25.9 26.2 26.6 27.1
Fixed capital formation, real growth % y-o-y 4.0 8.0 7.5 7.7 7.7 7.7
Exchange rate VND/USD, ave 22,933.30 22,600.00 23,000.00 23,230.00 23,462.30 23,696.92
Exchange rate VND/EUR, ave 27,127.91 25,764.00 26,680.00 27,876.00 28,858.63 29,384.18
Goods and services exports, USDbn 340.0 404.7 463.7 527.6 600.0 682.2
Goods and services imports, USDbn 289.5 346.7 399.2 458.1 524.5 600.0
Balance of trade in goods and services, USDbn 50.5 58.0 64.4 69.6 75.4 82.3
Balance of trade in goods and services, % of GDP 17.6 18.0 18.5 18.3 18.2 18.3
Current account balance, USDbn 8.4 9.5 9.3 9.0 8.9 9.2
Current account balance, % of GDP 2.9 2.9 2.7 2.4 2.2 2.0
Foreign reserves ex gold, USDbn 136.9 163.7 191.2 219.1 247.6 276.8
Import cover, months 5.3 5.3 5.4 5.4 5.4 5.3
Budget balance, USDbn -22.2 -19.5 -21.0 -22.5 -24.0 -25.6
Budget balance, % of GDP -7.7 -6.1 -6.0 -5.9 -5.8 -5.7

MACROECONOMIC FORECASTS (VIETNAM 2027-2031)

Indicator 2027f 2028f 2029f 2030f 2031f
Nominal GDP, USDbn 488.4 530.3 576.0 624.8 679.2
Nominal GDP, EURbn 390.7 424.2 460.8 499.8 543.3
Real GDP growth, % y-o-y 5.7 5.8 5.8 5.6 5.9
GDP per capita, USD 4,768 5,146 5,558 5,998 6,489
GDP per capita, EUR 3,814 4,117 4,446 4,798 5,191
Population, mn 102.43 103.04 103.62 104.16 104.66
Consumer price inflation, % y-o-y, ave 3.7 3.7 3.7 3.7 3.7
Lending rate, %, ave 5.5 5.5 5.5 5.5 5.5
Central bank policy rate, % eop 4.50 4.50 4.50 4.50 4.50
Private final consumption, % of GDP 70.1 70.6 71.0 71.6 72.0
Private final consumption, real growth % y-o-y 6.5 6.5 6.5 6.5 6.5
Government final consumption, % of GDP 6.2 6.1 6.1 6.0 6.0
Government final consumption, real growth % y-o-y 4.8 4.8 4.8 4.8 4.8
Fixed capital formation, % of GDP 27.6 28.1 28.6 29.2 29.7
Fixed capital formation, real growth % y-o-y 7.7 7.7 7.7 7.7 7.7
Exchange rate VND/USD, ave 23,933.89 24,173.23 24,414.96 24,659.11 24,905.70
Exchange rate VND/EUR, ave 29,917.37 30,216.54 30,518.70 30,823.89 31,132.13
Goods and services exports, USDbn 779.7 884.2 1,002.7 1,139.9 1,288.0
Goods and services imports, USDbn 689.3 785.9 895.2 1,025.1 1,162.9
Balance of trade in goods and services, USDbn 90.5 98.3 107.5 114.8 125.1
Balance of trade in goods and services, % of GDP 18.5 18.5 18.7 18.4 18.4
Current account balance, USDbn 10.2 10.2 10.9 8.8 8.8
Current account balance, % of GDP 2.1 1.9 1.9 1.4 1.3
Foreign reserves ex gold, USDbn 307.7 339.3 372.1 403.4 435.5
Import cover, months 5.1 4.9 4.8 4.5 4.3
Budget balance, USDbn -27.3 -29.2 -31.1 -33.1 -35.3
Budget balance, % of GDP -5.6 -5.5 -5.4 -5.3 -5.2

f = Fitch Solutions forecast. Source: National sources, Fitch Solutions
Household Income Forecasts

HOUSEHOLD INCOME DATA (VIETNAM 2020-2026)
Indicator 2020e 2021e 2022f 2023f 2024f 2025f 2026f
Households, number 30,606,064 31,210,593 31,763,023 32,418,428 32,972,715 33,642,069 34,322,421
Households, % y-o-y 2.2 2.0 1.8 2.1 1.7 2.0 2.0
Average working
2.2 2.2 2.1 2.1 2.1 2.0 2.0
adults per household
Gross Income, per

137,370,294 142,204,102 155,486,036 170,054,889 185,476,124 202,525,034 220,591,461
household, VND
Gross Income, per

5,918 6,209 6,819 7,393 7,984 8,631 9,308
household, USD
Gross Income, per

53,667,206 55,590,441 60,874,946 66,671,479 72,807,151 79,590,429 86,778,548
capita, VND
Gross Income, per

2,312 2,427 2,669 2,898 3,134 3,392 3,662
capita, USD
Disposable Income,
109,896,235 113,763,282 124,388,829 136,043,911 148,380,899 162,020,027 176,473,168
per household, VND
Disposable Income,
4,735 4,967 5,455 5,914 6,387 6,905 7,447
per household, USD
Disposable Income,
42,933,764 44,472,353 48,699,956 53,337,183 58,245,721 63,672,343 69,422,839
per capita, VND
Disposable Income,
1,849 1,942 2,135 2,319 2,507 2,713 2,929
per capita, USD
Tax and social

contributions, % of 20.0 20.0 20.0 20.0 20.0 20.0 20.0
gross income
Tax and social

contributions, per 10,733,441.23 11,118,088.29 12,174,989.25 13,334,295.94 14,561,430.39 15,918,085.96 17,355,709.77
capita, VND
Tax and social

contributions, per 462.5 485.5 534.0 579.8 626.8 678.5 732.4
capita, USD
Households '000
9,126.5 10,081.0 11,887.5 13,644.8 15,388.2 17,282.9 19,186.9
earning USD5,000+
Households '000
2,259.6 2,563.5 3,204.5 3,891.1 4,650.4 5,565.1 6,594.6
earning USD10,000+
Households '000
50.0 57.2 73.0 90.6 110.8 136.4 166.8
earning USD50,000+
Households earning
29.8 32.3 37.4 42.1 46.7 51.4 55.9
USD5,000+, % total
Households earning
7.4 8.2 10.1 12.0 14.1 16.5 19.2
USD10,000+, % total
Households earning
0.2 0.2 0.2 0.3 0.3 0.4 0.5
USD50,000+, % total
Vietnam Demographic Outlook

Demographic analysis is a key pillar of our macroeconomic and industry forecasting model. The total population is a key variable in
consumer demand, and an understanding of the demographic profile is essential to understanding issues ranging from future
population trends to productivity growth and government spending requirements.
The accompanying charts detail the population pyramid for 2019, the change in the structure of the population between 2019 and
2050 and the total population between 1990 and 2050. The tables show indicators from all of these charts, in addition to key
metrics such as population ratios, the urban/rural split and life expectancy.
Population
Vietnam - Population, mn (1990-2050)
e/f = Fitch Solutions estimate/forecast. Source: World Bank, UN, Fitch Solutions
Population Pyramid
Vietnam – 2019 Male vs Female Population, '000 (LHS) & 2019 vs 2050 Population, '000 (RHS)
Source: World Bank, UN, Fitch Solutions
POPULATION HEADLINE INDICATORS (VIETNAM 1990-2025)

Indicator 1990 2000 2005 2010 2015 2020e 2025f
Population, % y-o-y 1.11 0.93 1.01 1.05 0.91 0.69
Population, total, male, '000 33,653.3 39,570.5 41,531.5 43,746.4 46,197.5 48,598.3 50,471.2
Population, total, female, '000 34,335.6 40,339.9 42,301.1 44,221.3 46,479.6 48,740.3 50,635.6
Population, total, '000 67,988.9 79,910.4 83,832.7 87,967.7 92,677.1 97,338.6 101,106.8
Population ratio, male/female 0.98 0.98 0.98 0.99 0.99 1.00 1.00
KEY POPULATION RATIOS (VIETNAM 1990-2025)
Indicator 1990 2000 2005 2010 2015 2020e 2025f
Dependent ratio, % of total working age 75.4 61.3 50.7 43.1 42.2 45.1 47.7
Dependent population, total, '000 29,236.3 30,360.4 28,206.9 26,493.4 27,514.1 30,233.4 32,643.8
Active population, % of total population 57.0 62.0 66.4 69.9 70.3 68.9 67.7
Active population, total, '000 38,752.6 49,550.0 55,625.8 61,474.3 65,162.9 67,105.2 68,463.1
Youth population, % of total working age 65.4 50.9 40.8 33.8 32.8 33.6 33.2
Youth population, total, '000 25,330.7 25,230.6 22,720.5 20,784.3 21,343.4 22,576.7 22,732.5
Pensionable population, % of total working age 10.1 10.4 9.9 9.3 9.5 11.4 14.5
Pensionable population, '000 3,905.5 5,129.8 5,486.4 5,709.1 6,170.8 7,656.7 9,911.3
URBAN/RURAL POPULATION AND LIFE EXPECTANCY (VIETNAM 1990-2025)
Indicator 1990 2000 2005 2010 2015 2020e 2025f
Urban population, % of total 20.3 24.4 27.3 30.4 33.8 37.3 40.9
Rural population, % of total 79.7 75.6 72.7 69.6 66.2 62.7 59.1
Urban population, '000 13,772.5 19,477.4 22,870.4 26,757.1 31,333.2 36,346.2 41,361.8
Rural population, '000 54,216.4 60,433.0 60,962.3 61,210.5 61,343.9 60,992.4 59,745.0
Life expectancy at birth, male, years 66.0 68.4 69.7 70.7 71.0 71.4 72.1
Life expectancy at birth, female, years 75.1 77.7 78.4 78.9 79.2 79.6 80.1
Life expectancy at birth, average, years 70.6 73.0 74.1 74.8 75.1 75.5 76.1
POPULATION BY AGE GROUP (VIETNAM 1990-2025)
Indicator 1990 2000 2005 2010 2015 2020e 2025f
Population, 0-4 yrs, total, '000 9,142.0 7,190.8 6,697.0 7,210.3 7,642.8 7,892.5 7,374.4
Indicator 1990 2000 2005 2010 2015 2020e 2025f
Population, 75-79 yrs, total, '000 746.9 972.4 1,062.1 1,241.9 1,143.5 1,126.5 1,373.8
Population, 80-84 yrs, total, '000 426.5 588.0 713.7 790.7 929.8 860.6 854.8
Population, 100+ yrs, total, '000 1.9 6.3 10.4 14.0 19.3 23.8 30.6
POPULATION BY AGE GROUP % (VIETNAM 1990-2025)
Indicator 1990 2000 2005 2010 2015 2020e 2025f
Population, 0-4 yrs, % total 13.45 9.00 7.99 8.20 8.25 8.11 7.29
Population, 100+ yrs, % total 0.00 0.01 0.01 0.02 0.02 0.02 0.03
Banking & Financial Services Methodology

Industry Forecast Methodology
Our industry forecasts are generated using the best-practice techniques of time-series modelling and causal/econometric
modelling. The precise form of model we use varies from industry to industry, in each case being determined, as per standard
practice, by the prevailing features of the industry data being examined.
Common to our analysis of every industry is the use of vector autoregressions, which allow us to forecast a variable using more than
the variable's own history as explanatory information. For example, when forecasting oil prices, we can include information about oil
consumption, supply and capacity.
When forecasting for some of our industry sub-component variables, however, using a variable's own history is often the most
desirable method of analysis. Such single-variable analysis is called univariate modelling. We use the most common and versatile
form of univariate models: the autoregressive moving average model (ARMA).
In some cases, ARMA techniques are inappropriate because there is insufficient historic data or data quality is poor. In such cases,
we use either traditional decomposition methods or smoothing methods as a basis for analysis and forecasting.
We mainly use OLS estimators, and we use a 'general-to-specific' method in order to avoid relying on subjective views and
encourage the use of objective views. We mainly use a linear model, but simple non-linear models, such as the log-linear model, are
used when necessary. During periods of 'industry shock', for example poor weather conditions impeding agricultural output, dummy
variables are used to determine the level of impact.
Effective forecasting depends on appropriately selected regression models. We select the best model according to various different
criteria and tests, including but not exclusive to:
• Explanatory power: R2 tests explanatory power; adjusted R2 takes degree of freedom into account;
• Testing the directional movement and magnitude of coefficients;
• Hypothesis testing to ensure coefficients are significant (normally t-test and/or P-value); and
• All results are assessed to alleviate issues related to auto-correlation and multi-collinearity.
Human intervention plays a necessary and desirable role in all of our industry forecasting. Experience, expertise and knowledge of
industry data and trends ensure analysts spot structural breaks, anomalous data, turning points and seasonal features where a
purely mechanical forecasting process would not.
Banking & Financial Services Methodology
Our Banking & Financial Services Report series is closely integrated with our analysis of macroeconomic trends and financial
markets. The reports draw heavily on our extensive economic dataset, which includes up to 550 indicators per market, as well as our
in-depth view of each local market. We collate our banking databanks from official sources (including central banks and regulators)
wherever possible, and only fall back on secondary sources where all attempts to secure primary data have failed. Company data is
sourced, in the first instance, from company reports, with central bank, regulator or trade association data only used as a backup.
• The banking forecast scenario focuses on total assets, client loans and client deposits.
• Total assets are analogous to the combined balance sheet assets of all commercial banks in a particular market. They do not
incorporate the balance sheet of the central bank in question.
• Client loans are loans to non-bank clients. They include loans to public sector and state-owned enterprises. However, they
generally do not include loans to governments, government (or non-government) bonds held or loans to central banks.
• Client deposits are deposits from the non-bank public. They generally include deposits from public sector and state-owned
enterprises. However, they only include government deposits if these are significant.
• We take into account capital items and bond portfolios. The former include shareholders funds, and subordinated debt that may
be counted as capital. The latter includes government and non-government bonds.
In quantifying the collective balance sheets of a particular market, we assume that three equations hold true:
• Total assets = total liabilities and capital

• Total assets = client loans + bond portfolio + other assets
• Total liabilities and capital = capital items + client deposits + other liabilities
In terms of the equations, other assets and other liabilities are balancing items that ensure equations two and three can be
reconciled with equation one. In practice, other assets and other liabilities are analogous to inter-bank transactions. In some cases,
such transactions are generally with foreign banks.
In most markets for which we have compiled figures, building societies/thrifts are an insignificant part of the banking landscape,
and we do not include them in our figures. The US is the main exception to this.
In some cases, total assets and client loans include significant amounts that are owned or that have been lent to customers in
another market. In some cases, client deposits include significant amounts that have been deposited by residents of another
market. Such cross-border business is particularly important in major financial centres such as Singapore and Hong Kong, the richer
OECD markets and certain Central and Eastern European markets.
Banking Industry Risk Indicator Methodology

Banking Industry Risk Indicator Methodology
Fitch Solutions' Banking Industry Risk Indicator (BIRI) is a composite score that measures the vulnerability of a market's banking
system to unpredictable and unobserved financial stress events.
BIRI is a quantitative, data-driven score expressed on a 0 to 100 scale, with 100 indicating the lowest risk and 0 indicating the
highest risk. BIRI is updated quarterly and is a point-in-time score. It incorporates banking industry and macroeconomic factors. BIRI
is a score at a market level that converts fundamental data (historical observations and model-based estimates) into a normalised
banking industry risk score.
The BIRI calculation methodology comprises the following steps:
1. Quarterly Data Sourcing. We source quarterly series from the IMF (Financial Soundness Indicators and International Financial
Statistics) and national sources such as central banks, or annual series from national or international sources (eg, World Bank) which
are interpolated into quarterly frequency. The fundamental indicators selection is based on academic literature research and
availability. To calculate the BIRI scores, all fundamental indicators selected need to be available. The data legend below provides a
high level of information including descriptions and sources.
Relation
Indicator BIRI Component Data Description Data Sources
To Risk
Regulatory Capital To Risk- Financial (Capitalisation & IMF Financial Soundness

- Ratio
Weighted Assets Leverage) Indicators, Fitch Solutions
Bank Credit (Private Sector) To + Financial (Credit Expansion) Ratio, excess value: difference World Bank, Fitch Solutions
Relation
Indicator BIRI Component Data Description Data Sources
To Risk
between current period value

GDP
and 12-quarter moving average
Loans To Deposits + Financial (Funding) Ratio Fitch Solutions
Non-Performing Loans To Gross IMF Financial Soundness

+ Financial (Asset Quality) Ratio
Loans Indicators, Fitch Solutions
IMF Financial Soundness

Short-Term Liabilities To Total
+ Financial (Liquidity) Ratio Indicators & International
Assets
Financial Statistics

Liquid Assets To Total Assets - Financial (Liquidity) Ratio Indicators & International

Liquid Assets To Short-Term
- Financial (Liquidity) Ratio Indicators & International
Liabilities
Ratio, excess value: difference

Government Debt (% of GDP) + Government Finance between current period value World Bank, Fitch Solutions
Government Interest Payments

+ Government Finance Ratio World Bank, Fitch Solutions
(% of revenue)
Government Balance (% of GDP) - Government Finance Ratio World Bank, Fitch Solutions
GDP At PPP, USD Per Capita - Living Standard Ratio Fitch Solutions
Regulatory Quality &

Operational Risk - Index Fitch Solutions
Environment
World Bank Governance

Regulatory Quality &
Indicators: Government - Indicator World Bank
Environment
Effectiveness
Word Bank Governance Regulatory Quality &

- Indicator World Bank
Indicators: Regulatory Quality Environment
Ratio, excess value: difference

Gross External Debt (% of GDP) + International Linkages between current period value Fitch Solutions
Current Account Balance (% of

- International Linkages Ratio World Bank, Fitch Solutions
GDP)
% quarterly rolling standard IMF International Financial

Real GDP Volatility + Economic Volatility
deviation Statistics, Fitch Solutions
% quarterly rolling standard IMF International Financial

CPI Volatility + Economic Volatility
deviation Statistics, national sources
Note: In the 'Relation To Risk' column, '+' means that a higher indicator value implies higher risk and '-' means that a higher value implies lower risk. Source: Fitch Solutions
2. Data Transformation. BIRI is composed of indicators whose larger value is associated with higher risk/more elevated
vulnerabilities and indicators whose larger value is associated with lower risk/less elevated vulnerabilities. The indicators whose
larger value is associated with higher risk are pre-multiplied with a minus one, so when aggregated all indicators have the same
interpretation (larger value means lower risk).
3. Data Estimation. BIRI methodology is based on the standardisation and aggregation of historical quarterly data. When quarterly
historical data points are not available, they are estimated.
There are three cases of missing data: (i) Historical data exist but in annual and not quarterly frequency; (ii) Historical quarterly data
exist but there are some gaps between the existing historical values; (iii) Historical data are available but up to a previous quarter and
not to the latest one.
In the first two cases the missing data are estimated via linear interpolations. Linear interpolation is a curve fitting method where
new data point estimates are constructed within the range of the known historical data. Thus, when only annual data are available,
we interpolate from annual to quarterly frequency, keeping the year-end or year-average value intact. When there are gaps between
existing historical values, the linearly interpolated data are constructed within the range of these values.
When the last observations are not available, they are estimated using the fitted values from the Fitch Solutions Autoregressive
Integrated Moving Average (ARIMA) model. The model performs the three steps of the Box-Jenkins methodology: (i) Identification
(Augmented Dickey Fuller stationarity test); (ii) Estimation (Maximum Likelihood Estimation); (iii) Residuals testing (Normality test,
Autocorrelation test), as well as additional tests such as Residuals Heteroscedasticity.1 2 3
1
We avoid extrapolation techniques to populate the edge missing values, because they often produce inaccurate estimates.
2
We do not estimate annual, survey-based indicators. We drag forward and fill in the quarterly values with the previous annual value
available.
3
There are very few cases when it is not possible to create a model-based estimate (for example, because the outcome of one of the
corresponding hypothesis tests in the Box-Jenkins methodology is not desirable). In these cases, any missing latest historical values
are filled with estimates based on trend analysis.
4. Fundamental Indicators Normalisation. Because the fundamental indicators are not of the same measure, we normalise
them using the min-max approach. This approach ranges the fundamental data from 0 to 100. Upper and lower time-invariant
bounds have been imposed on the distributions to ensure that we obtain scores that do not change over time, so they are
comparable. The lower and upper bounds have been based on the first and 99th percentiles respectively, of the distribution of the
historical fundamental data available up to Q4 2021.
The min-max approach for the fundamental indicator X is:
Xnormal_t = [ (X_t – min(X)) / (max(X) – min(X)) ] x 100
where Xnormal_t is the normalised value at time t, X_t is the actual value of the fundamental indicator at time t and min(X) and
max(X) are the minimum and maximum values (ie, the lower and upper time-invariant bounds respectively) of the corresponding
fundamental indicator.
5. Principal Component Analysis. BIRI comprises six components which are made up of fundamental indicators. The weights
assigned in each linear combination of components or indicators are based on Principal Component Analysis (PCA). This is a
statistical procedure that converts and linearly combines our components/indicators into the most important variables called
principal components. Principal components explain most of the variance and summarise the most information in our data. First, we
apply PCA, separately, to the fundamental indicators that form each BIRI component. Then we apply the PCA to the six BIRI
components. We select weights and then construct linear combinations that have a very high Pearson correlation coefficient with
the first (most important) principal component calculated from the corresponding PCA.
The indicators are standardised before being used for PCA. The standardisation is different to the min-max approach described
above. The fundamental data used for PCA are standardised by subtracting the sample mean and dividing by the standard
deviation. Standardisation ensures that all indicators become of the same measure. For PCA analysis, we use a historical sample
available that consists of 122 markets.
6. Normalised Fundamental Indicators Aggregation Into Components. First, we aggregate the normalised fundamental
indicators into components.
Below is a summary of the sub-categories of the Financial component, as well as the first aggregation step.
Financial Component Sub-Categories
• Capitalisation & Leverage: Regulatory Capital To Risk-Weighted Assets

• Credit Expansion: Bank Credit To GDP gap (excess value: difference between current period value and 12-quarter moving
average)
• Asset Quality: Non-Performing Loans To Gross Loans
• Funding: Loans To Deposits
• Liquidity: Weighted average of Liquid Assets To Total Assets, Liquid Assets To Short-Term Liabilities, Short-Term Liabilities To
Total Assets
Aggregation Level 1 – From Normalised Fundamental Indicators To Components
• Financial Component = weighted average of Capitalisation & Leverage, Asset Quality, Funding, Credit Expansion, Liquidity
• Government Finance Component = weighted average of Government Debt (% of GDP), Government Interest Payments (% of
revenue), Government Balance (% of GDP)
• Regulatory Quality & Environment Component = weighted average of Operational Risk, Government Effectiveness,
Regulatory Quality
• Living Standard Component = GDP At PPP, USD Per Capita
• International Linkages Component = weighted average of Gross External Debt (% of GDP), Current Account Balance (% of
GDP)
• Economic Volatility Component = weighted average of Real GDP Volatility and CPI Volatility.
7. Components Normalisation. After the first level of aggregation, the six components are normalised using the min-max
approach described in step 4 above. The lower and upper time-invariant bounds used are based on the 1st and 99th percentiles
respectively, of the distribution of the historical component scores most recently available.
8. Normalised Components Aggregation Into BIRI. The second step of aggregation is to linearly combine the six normalised
components to calculate BIRI.
Aggregation Level 2 – From Normalised Components To BIRI
BIRI = weighted average of normalised Financial component, Government Finance normalised component, normalised Regulatory
Quality & Environment component, normalised Living Standard component, International Linkages normalised component,
normalised Economic Volatility component
9. BIRI Normalisation. The weighted average of the six normalised components (BIRI) is normalised to ensure that it is expressed
on a 0 to 100 scale.
Aggregation Methodology
Source: Fitch Solutions
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ondon. E14 5GN, UK
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Web: www.fitchsolutions.com
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Q2 2022

Banking Industry Risk Indicator ............................................................................................................................................... 7

Banking Industry Risk Indicator Scores ...............................................................................................................................10

Asset Management .....................................................................................................................................................................30

Macroeconomic Overview ........................................................................................................................................................38

Household Income Forecasts ...............................................................................................................................................................................................45

Vietnam Demographic Outlook ..............................................................................................................................................47

Banking & Financial Services Methodology........................................................................................................................50

Banking Industry Risk Indicator Methodology ..................................................................................................................51

Favourable Demographics Underpin Positive Long-Term Outlook For Financial Services

e/f = Fitch Solutions estimate/forecast. Source: UN, Fitch Solutions

Latest Trends And Developments

Banking Industry Risk Indicator

Falling Below Multi-Year Average

Economic Volatility Has Led To Heightened Risks

Banking Industry Risk Indicator Scores

Singapore 88.00 51.50 56.10 100.00 100.00 80.84 62.47

Hong Kong 87.37 73.63 61.89 92.11 94.99 67.31 44.22

Taiwan 77.91 30.31 66.21 90.35 87.93 90.47 78.60

Australia 72.89 49.99 40.60 88.87 92.20 55.56 66.01

South Korea 71.92 48.13 58.08 85.58 80.75 55.37 74.24

Japan 67.04 47.87 32.18 84.61 86.65 51.78 71.05

Malaysia 63.98 66.42 35.07 76.29 73.39 63.47 44.50

New Zealand 59.29 25.45 47.77 85.60 92.77 41.52 67.09

Indonesia 53.52 68.49 33.26 60.28 51.64 52.86 65.81

China 51.23 45.09 49.58 67.96 54.51 63.34 63.00

Thailand 41.55 41.72 42.45 68.02 53.72 46.73 50.56

Maldives 39.89 96.75 7.59 67.25 29.85 24.41 23.84

Philippines 37.27 58.24 33.85 53.45 41.68 54.80 42.69

Solomon Islands 33.60 94.57 56.79 25.66 11.33 44.78 37.54

Vietnam 33.45 30.06 40.61 52.94 45.46 68.32 58.87

Pakistan 31.75 73.94 14.25 42.18 24.13 50.74 53.56

Sri Lanka 30.81 53.50 0.00 62.76 40.32 43.32 49.95

India 25.42 42.65 14.98 49.93 46.78 55.43 36.12

Vanuatu 25.03 56.04 63.29 35.00 23.09 25.94 53.74

Fiji 21.67 52.61 31.17 55.54 36.77 16.78 27.80

Bangladesh 21.11 40.67 34.50 43.79 19.25 50.78 61.99

Afghanistan 16.54 98.19 30.76 25.18 0.00 0.00 37.23

Cambodia 14.45 20.61 61.73 41.32 26.84 33.56 57.39

Annual asset growth continues at 13-15%

e/f = Fitch Solutions estimate/forecast. Source: IMF, Fitch Solutions

Financial Stability Risks Remain Elevated In Vietnam, But Strong

Source: World Bank, Fitch Solutions

Headline NPL Ratio Has Continued To Trend Downwards Despite Pandemic

Source: IMF, Fitch Solutions

Loan Forbearance Obscures True Picture Of Asset Quality

Capital Adequacy Is Low And Trending Downwards

Source: IMF, Fitch Solutions

Strong Growth Rebound Should Provide Respite For Banks

Total assets, VNDmn 12,061,660,232 13,750,292,665 15,812,836,564 17,947,569,501 20,370,491,383 23,120,507,720

Total assets, USDmn 521,450 604,142 693,545 780,329 876,904 985,432

Total assets, % of GDP 191.6 209.1 217.9 224.1 231.3 238.5

Total assets, % y-o-y 12.1 14.0 15.0 13.5 13.5 13.5

Client loans, VNDmn 9,564,760,159 10,903,826,581 12,539,400,568 14,232,219,645 16,153,569,297 18,334,301,153

Client loans, USDmn 413,503 479,078 549,973 618,792 695,375 781,436

Client loans, % of GDP 152.0 165.8 172.8 177.7 183.4 189.1

Client loans, % y-o-y 12.1 14.0 15.0 13.5 13.5 13.5

Total assets, VNDmn 26,241,776,263 29,784,416,058 33,805,312,226 38,369,029,377 43,548,848,342 49,427,942,869

Total assets, USDmn 1,107,391 1,244,445 1,398,460 1,571,537 1,766,034 1,984,603

Total assets, % of GDP 246.6 255.3 264.2 273.4 283.2 292.8

Total assets, % y-o-y 13.5 13.5 13.5 13.5 13.5 13.5

Client loans, VNDmn 20,809,431,808 23,618,705,102 26,807,230,291 30,426,206,381 34,533,744,242 39,195,799,715

Client loans, USDmn 878,149 986,830 1,108,963 1,246,211 1,400,445 1,573,767