28.9 C
Ho Chi Minh City
Monday, April 7, 2025

spot_img

TAG

banking sector

Net interest margins shrink

As banks lower lending rates to support economic growth, they will have a tough time managing capital mobilization costs to stabilize their net interest margins (NIMs). Financial statements for the fourth quarter of 2024 indicated a further narrowing of NIMs across the system, though the impact varies among banks. NIM is a key measure of bank profitability, reflecting the spread between lending rates and funding costs. It is influenced by loan interest rates, capital costs, and credit growth. In 2024, credit growth surged to 15.09%, the highest in seven years. While this rapid expansion boosted interest income, banks faced a dilemma: maintaining low lending rates to stimulate economic activity while managing capital costs effectively. Lower deposit rates helped reduce funding costs, but lower lending rates also squeezed profit margins. As both lending and deposit rates declined, banks’ ability to adjust these two variables became crucial in maintaining profitability. If funding costs were not reduced at the same pace as lending rates, NIMs suffered. This presented both risks and opportunities. Some banks saw further NIM contractions in Q4 2024, choosing to sacrifice short-term profitability for long-term growth. Others successfully optimized funding strategies, managing to maintain or even improve their NIMs despite […]
To read more, please click here.

Tight real estate credit

That the three real estate-related laws began taking effect on August 1, 2024 is expected to give a much-needed boost to the real estate...

Banks rush to issue bonds

April 2024 saw banks issuing VND7,800 billion of bonds via private placement, accounting for over 71% of the total value of debt issued by...

Greater transparency counts

Associate Professor Dr. Nguyen Huu Huan at the University of Economics HCMC spoke with The Saigon Times over non-performing loans (NPL) in the banking...

Differences in money supply

The credit growth target which the State Bank of Vietnam (SBV) has set for this year is 15%. There has emerged concern over the...

Banks slash deposit rates further

HCMC – Three State-run banks – BIDV, VietinBank and Agribank – further cut deposit rates by 20 to 40 basis points today, January 17. BIDV...

PM urges SBV to ease access to credit

HCMC - Prime Minister Pham Minh Chinh has ordered the State Bank of Vietnam (SBV), the central bank, to regulate the financial market in...

Latest news

spot_img