Vietcombank
Vietnam is a country on the move. Inflation is under control, unemployment is low and growth is tipped by the IMF to come in at 6.5% this year and next. Now the country just needs a good banking sector.
Fortunately, it has a few standout lenders, notably Vietcombank. Since Vietnam’s 2012 banking crisis, it has husbanded its resources wisely, resolving bad loans and investing in digital.
In April this year, it received approval to sell a 10% stake to up to 10 foreign investors. Japan’s Mizuho already owns a 15% stake, which it bought in 2011.
With more than eight million retail customers, Vietcombank has the scale and the numbers to justify this award. Its market cap at the end of June was D207 trillion ($8.9 billion), putting it ahead of its peers, both state-run and privately owned. Total assets increased 31.4% year on year in 2017, deposits rose 21% and its retail loan book jumped 53%.
That continued into 2018, with pre-tax profits up 52.7% year on year in the first half – the biggest percentage increase of any onshore lender.
Its return on assets hit 1.24% at the end of June, while its return on equity was 22.71%, higher than any of its rivals. And its net interest margin, which has been rising since 2012, was 2.76% at the end of the first half, versus 2.66% six months earlier.
Even non-performing loans, a long-standing problem, seem to be under control, falling to a record low of 1.11% at the end of 2017.
That Vietcombank is the country’s best lender is a view shared by its peers. They have “good management, strong links to government, a good brand, lots of branches, and real scale”, observes a banker at a rival institution. “There’s a lot to like about them.”