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Q3 2012 www.businessmonitor.com Vietnam commercial Banking report INCLUDES BMI'S FORECASTS iSSn 1758-454X published by
Q3 2012 www.businessmonitor.com Vietnam commercial Banking report INCLUDES BMI'S FORECASTS iSSn 1758-454X published by

Q3 2012

www.businessmonitor.com

Vietnam

commercial Banking report

INCLUDES BMI'S FORECASTS

iSSn 1758-454X

published by Business monitor international ltd.

commercial Banking report INCLUDES BMI'S FORECASTS iSSn 1758-454X published by Business monitor international ltd.
VIETNAM COMMERCIAL BANKING REPORT Q3 2012 INCLUDES 5-YEAR FORECASTS TO 2016 Part of BMI’s Report

VIETNAM COMMERCIAL BANKING REPORT Q3 2012

INCLUDES 5-YEAR FORECASTS TO 2016

Part of BMI’s Report & Forecasts Series

Published by: Business Monitor International

Copy deadline: July 2012

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Vietnam Commercial Banking Report Q3 2012

Vietnam Commercial Banking Report Q3 2012

CONTENTS

Executive Summary

5

Table: Levels (VNDbn)

5

Table: Levels (US$bn)

5

Table: Levels At October 2011

5

Table: Annual Growth Rate Projections 2012-2016 (%)

5

Table: Ranking Out Of 59 Countries Reviewed In 2011

6

Table: Projected Levels (VNDbn)

6

Table: Projected Levels (US$bn)

6

SWOT Analysis

7

Vietnam Commercial Banking SWOT

7

Vietnam

Political SWOT

8

Vietnam Economic SWOT

9

Vietnam Business Environment SWOT

10

Business Environment Outlook

11

Commercial Banking Business Environment Rating

11

Table: Commercial Banking Business Environment Ratings

11

Commercial Banking Business Environment Rating Methodology

12

Table: Asia Commercial Banking Business Environment Ratings

13

Global Commercial Banking Outlook

14

Asia Outlooks

22

Trade Finance Growth Set To Slow

Asia Banking Sector Forecast Overview

22

26

Table: Banks' Bond Portfolios 2011

26

Table: Asia Commercial Banking Business Environment Ratings

27

Table: Comparison of Loan/Deposit & Loan/Asset & Loan/GDP ratios

28

Table: Anticipated Developments in 2012

29

Table: Comparison of Total Assets & Client Loans & Client Deposits (US$bn)

30

Table: Comparison of US$ Per Capita Deposits (2011)

31

Table: Interbank Rates and Bond Yields

32

Vietnam Specific Banking Sector Outlook

Assessing The Risks Behind Vietinbank's Debt Issue

Economic Outlook

Table: Vietnam – Economic Activity, 2011-2016

Competitive Landscape

33

33

37

39

40

Market Structure

40

Protagonists

40

Table: Protagonists In Vietnam's Commercial Banking Sector

40

Definition Of The Commercial Banking Universe

40

List Of Banks

41

Table: Financial Institutions In Vietnam

41

Vietnam Commercial Banking Report Q3 2012

Company Profiles

44

Bank for Foreign Trade of Vietnam (Vietcombank)

44

Table: Vietnam Stock Market Indicators

45

Table: Vietnam Balance Sheet (US$mn)

45

Table: Vietnam Key Ratios (%)

45

VietinBank

46

Table: Key Statistics For VietinBank, 2005-2008 (VNDmn)

47

Agribank

48

Table: Vietnam Balance Sheet (LCYmn)

49

Table: Vietnam Balance Sheet (US$mn)

49

Table: Vietnam Key Ratios (%)

49

Asia Commercial Bank

50

Table: Vietnam Stock Market Indicators

51

Table: Vietnam Balance Sheet (LCYmn)

51

Table: Vietnam Balance Sheet (US$mn)

51

Table: Vietnam Key Ratios (%)

52

Eximbank

53

Table: Balance Sheet (VNDmn, unless stated)

54

Table: Balance Sheet (US$mn, unless stated)

54

Table: Key Ratios (%)

54

Vietnam Technological and Commercial Joint-stock Bank (Techcombank)

55

Table: Vietnam Balance Sheet (LCYmn)

56

Table: Vietnam Balance Sheet (US$mn)

56

Table: Vietnam Key Ratios (%)

56

Viet A Joint Stock Commercial Bank (Vietabank)

57

Table: Vietnam Stock Market Indicators

57

Table: Vietnam Balance Sheet (LCYmn)

58

Table: Vietnam Balance Sheet (US$mn)

58

Table: Vietnam Key Ratios (%)

59

Housing Development Commercial Joint Stock Bank (HDBank)

60

Sacombank

61

Table: Stock Market Indicators

62

Table: Balance Sheet (VNDmn, unless stated)

62

Table: Balance Sheet (US$mn, unless stated)

63

Table: Key Ratios (%)

63

BMI Banking Sector Methodology

64

Commercial Bank Business Environment Rating

66

Table: Commercial Banking Business Environment Indicators And Rationale

67

Table: Weighting Of Indicators

68

Vietnam Commercial Banking Report Q3 2012

Executive Summary

Table: Levels (VNDbn)

 

Client

Bond

Liabilities

Client

Date

Total assets

loans

portfolio

Other

and capital

Capital

deposits

Other

October 2010

2,771,909.8 2,314,760.0 210,505.1 246,644.7

2,771,909.8 384,514.0

2,106,934.6 280,461.2

October 2011

3,264,325.0 2,717,010.0 256,893.0 290,422.0

3,264,325.0 533,828.0

2,412,745.0 317,752.0

Change, %

18%

17%

22%

18%

18%

39%

15%

13%

Source: BMI; Central banks; Regulators

 

Table: Levels (US$bn)

 
 

Total

Client

Bond

Liabilities

Client

Date

assets

loans

portfolio

Other

and capital

Capital

deposits

Other

October 2010

142.2

118.7

10.8

12.6

142.2

19.7

108.1

14.4

October 2011

155.4

129.4

12.2301

13.8

155.4

25.4

114.9

15.1

Change, %

9%

9%

13%

9%

9%

29%

6%

5%

Source: BMI; Central banks; Regulators

Table: Levels At October 2011

Loan/deposit ratio

Loan/asset ratio

Loan/GDP ratio

GDP Per Capita, US$

Deposits per capita, US$

112.61%

83.23%

113.06%

1,072

1,296

Rising

Falling

Falling

Source: BMI; Central banks; Regulators

 

Table: Annual Growth Rate Projections 2012-2016 (%)

 
 

Assets

Loans

Deposits

Annual Growth Rate

16

16

11

CAGR

20

19

13

Ranking

3

3

15

Source: BMI; Central banks; Regulators

Vietnam Commercial Banking Report Q3 2012

Table: Ranking Out Of 59 Countries Reviewed In 2011

Loan/deposit ratio

Loan/asset ratio

Loan/GDP ratio

10

1

13

Local currency asset growth

Local currency loan growth

Local currency deposit growth

3

3

8

Source: BMI; Central banks; Regulators

Table: Projected Levels (VNDbn)

2009

2010

2011e

2012f

2013f

2014f

2015f

2016f

Total assets

2,286,320.58 2,953,153.46 3,632,378.76 4,467,825.87 5,406,069.30 6,487,283.16 7,654,994.13 8,879,793.19

Client loans

1,869,260.00 2,475,540.00 3,020,158.80 3,684,593.74 4,458,358.42 5,350,030.10 6,313,035.52 7,323,121.21

Client deposits

1,680,716.80 2,209,896.20 2,651,875.44 3,076,175.51 3,506,840.08 3,962,729.29 4,438,256.81 4,926,465.06

e/f = estimate/forecast. Source: BMI; Central banks; Regulators

Table: Projected Levels (US$bn)

 

2008

2009

2010

2011e

2012f

2013f

2014f

2015f

2016f

Total assets

99.94

123.73

151.46

172.68

212.40

259.91

315.45

376.54

441.78

Client loans

76.60

101.16

126.96

143.58

175.16

214.34

260.15

310.53

364.33

Client deposits

76.71

90.95

113.34

126.07

146.24

168.60

192.69

218.31

245.10

e/f = estimate/forecast. Source: BMI; Central banks; Regulators

Vietnam Commercial Banking Report Q3 2012

SWOT Analysis

Vietnam Commercial Banking SWOT

Strengths

Rapid growth.

Untapped potential.

High savings rate of Vietnamese.

Weaknesses

Domestic banks lack capital and technology to sustain high credit growth.

The financial accounts of many banks are still opaque.

Opportunities

The population is still underbanked.

Income levels likely to rise strongly over the medium term.

Threats

Macroeconomic instability threatens the credibility of the government and could potentially move economic policy away from further liberalisation.

Vietnam Commercial Banking Report Q3 2012

Vietnam Political SWOT

Strengths

The Communist Party of Vietnam remains committed to market-oriented reforms and we do not expect major shifts in policy direction over the next five years. The one-party system is generally conducive to short-term political stability.

Relations with the US have witnessed a marked improvement, and Washington sees Hanoi as a potential geopolitical ally in South East Asia.

Weaknesses

Corruption among government officials poses a major threat to the legitimacy of the ruling Communist Party.

There is increasing (albeit still limited) public dissatisfaction with the leadership's tight control over political dissent.

Opportunities

The government recognises the threat corruption poses to its legitimacy, and has acted to clamp down on graft among party officials.

Vietnam has allowed legislators to become more vocal in criticising government policies. This is opening up opportunities for more checks and balances within the one- party system.

Threats

Macroeconomic instabilities in 2012 are likely to weigh on public acceptance of the one-party system, and street demonstrations to protest economic conditions could develop into a full-on challenge of undemocratic rule.

Although strong domestic control will ensure little change to Vietnam's political scene in the next few years, over the longer term, the one-party-state will probably be unsustainable.

Relations with China have deteriorated over recent years due to Beijing's more assertive stance over disputed islands in the South China Sea and domestic criticism of a large Chinese investment into a bauxite mining project in the central highlands, which could potentially cause wide-scale environmental damage.

Vietnam Commercial Banking Report Q3 2012

Vietnam Economic SWOT

Strengths

Weaknesses

Opportunities

Threats

Vietnam has been one of the fastest-growing economies in Asia in recent years, with GDP growth averaging 7.1% annually between 2000 and 2011.

The economic boom has lifted many Vietnamese out of poverty, with the official poverty rate in the country falling from 58% in 1993 to 14.0% in 2010.

Vietnam still suffers from substantial trade, current account and fiscal deficits, leaving the economy vulnerable to global economic uncertainties in 2012. The fiscal deficit is dominated by substantial spending on social subsidies that could be difficult to withdraw.

The heavily-managed and weak currency reduces incentives to improve quality of exports, and also keeps import costs high, contributing to inflationary pressures.

WTO membership has given Vietnam access to both foreign markets and capital, while making Vietnamese enterprises stronger through increased competition.

The government will in spite of the current macroeconomic woes, continue to move forward with market reforms, including privatisation of state-owned enterprises, and liberalising the banking sector.

Urbanisation will continue to be a long-term growth driver. The UN forecasts the urban population rising from 29% of the population to more than 50% by the early 2040s.

Inflation and deficit concerns have caused some investors to re-assess their hitherto upbeat view of Vietnam. If the government focuses too much on stimulating growth and fails to root out inflationary pressure, it risks prolonging macroeconomic instability, which could lead to a potential crisis.

Prolonged macroeconomic instability could prompt the authorities to put reforms on hold as they struggle to stabilise the economy.

Vietnam Commercial Banking Report Q3 2012

Vietnam Business Environment SWOT

Strengths

Weaknesses

Opportunities

Threats

Vietnam has a large, skilled and low-cost workforce, that has made the country attractive to foreign investors.

Vietnam's location – its proximity to China and South East Asia, and its good sea links – makes it a good base for foreign companies to export to the rest of Asia, and beyond.

Vietnam's infrastructure is still weak. Roads, railways and ports are inadequate to cope with the country's economic growth and links with the outside world.

Vietnam remains one of the world's most corrupt countries. According to Transparency International's 2011 Corruption Perceptions Index, Vietnam ranks 112 out of 183 countries.

Vietnam is increasingly attracting investment from key Asian economies, such as Japan, South Korea and Taiwan. This offers the possibility of the transfer of high-tech skills and know-how.

Vietnam is pressing ahead with the privatisation of state-owned enterprises and the liberalisation of the banking sector. This should offer foreign investors new entry points.

Ongoing trade disputes with the US, and the general threat of American protectionism, which will remain a concern.

Labour unrest remains a lingering threat. A failure by the authorities to boost skills levels could leave Vietnam a second-rate economy for an indefinite period.

Vietnam Commercial Banking Report Q3 2012

Business Environment Outlook

Commercial Banking Business Environment Rating

Table: Commercial Banking Business Environment Ratings

Limits of potential returns

 

Data

Score; out of 10

Ratings score; out of 100

Total assets; end 2012, US$bn

172.7

6

Market Structure 70

Growth in total assets; 2012-2016, US$bn

229.4

7

Growth in client loans; 2012-2016, US$bn

189.2

8

Per-capita GDP; 2012, US$

1,509.0

3

Country Structure 55

Tax

2.9

3

GDP volatility

0.9

10

Financial infrastructure

5.6

6

Risks to realisation of returns

Regulatory framework and development

2.0

2

Market Risk 37

Regulatory framework and competitive landscape

5.0

5

Moody's rating for local currency deposits

3.5

4

Long-term financial risk

4.6

5

Country Risk 46

Long-term external risk

3.3

3

Long-term policy continuity

7.0

7

Legal framework

3.7

4

Bureaucracy

3.9

4

Commercial banking business environment rating

57

Source: BMI, National Sources

Vietnam Commercial Banking Report Q3 2012

Commercial Banking Business Environment Rating Methodology

Since Q108, we have described numerically the banking business environment for each of the countries surveyed by BMI. We do this through our Commercial Banking Business Environment Rating (CBBER), a measure that ensures we capture the latest quantitative information available. It also ensures consistency across all countries and between the inputs to the CBBER and the Insurance Business Environment Rating, which is likewise now a feature of our insurance reports. Like the Business Environment Ratings calculated by BMI for all the other industries on which it reports, the CBBER takes into account the limits of potential returns and the risks to the realisation of those returns. It is weighted 70% to the former and 30% to the latter.

The evaluation of the 'Limits of potential returns' includes market elements that are specific to the banking industry of the country in question and elements that relate to that country in general. Within the 70% of the CBBER that takes into account the 'Limits of potential returns', the market elements have a 60% weighting and the country elements have a 40% weighting. The evaluation of the 'Risks to realisation of returns' also includes banking elements and country elements (specifically, BMI's assessment of long-term country risk). However, within the 30% of the CBBER that take into account the risks, these elements are weighted 40% and 60%, respectively.

Further details on how we calculate the CBBER are provided at the end of this report. In general, though, three aspects need to be borne in mind in interpreting the CBBERs. The first is that the market elements of the 'Limits of potential returns' are by far the most heavily weighted of the four elements. They account for 60% of 70% (or 42%) of the overall CBBER. Second, if the market elements are significantly higher than the country elements of the 'Limits of potential returns', it usually implies that the banking sector is (very) large and/or developed relative to the general wealth, stability and financial infrastructure in the country. Conversely, if the market elements are significantly lower than the country elements, it usually means that the banking sector is small and/or underdeveloped relative to the general wealth, stability and financial infrastructure in the country. Third, within the 'Risks to the realisation of returns' category, the market elements (i.e. how regulations affect the development of the sector, how regulations affect competition within it, and Moody's Investor Services' ratings for local currency deposits) can be markedly different from BMI's long-term risk rating.

Vietnam Commercial Banking Report Q3 2012

Table: Asia Commercial Banking Business Environment Ratings

Limits of Potential Returns

Risks to Potential Returns

Overall

 

Market

Country

Market

Country

Structure

Structure

Risks

Risks

Rating

Ranking

Bangladesh

50.0

45.0

43.3

44.0

46.7

52

China

93.3

55.0

63.3

74.0

75.5

13

Hong Kong

76.7

92.5

73.3

84.0

82.0

6

India

83.3

57.5

60.0

56.0

68.4

28

Indonesia

76.7

65.0

80.0

52.0

69.4

26

Japan

33.3

77.5

66.7

80.0

58.1

37

Malaysia

73.3

80.0

83.3

80.0

77.6

10

Pakistan

40.0

50.0

53.3

42.0

44.8

55

Philippines

50.0

62.5

60.0

58.0

56.1

44

Singapore

53.3

95.0

96.7

90.0

76.8

11

Sri Lanka

20.0

55.0

33.3

46.0

36.1

58

South Korea

80.0

82.5

83.3

76.0

80.4

8

Taiwan

76.7

72.5

86.7

76.0

76.6

12

Thailand

63.3

65.0

86.7

74.0

68.5

27

Vietnam

70.0

55.0

36.7

46.0

57.5

40

United States

90.0

85.0

100.0

80.0

88.0

2

Scores out of 100, with 100 the highest. Source: BMI

Vietnam Commercial Banking Report Q3 2012

Global Commercial Banking Outlook

Global Credit Divergence Despite major risks emanating from the European debt crisis (which we looked at closely in the Q1 2012 report in the article 'Europe On The Brink'), our overall global banking outlook remains relatively benign. Of 62 banking sectors forecast by BMI, we are forecasting lending expansion in 52 in 2012, with the nine non-growing or contracting sectors dominated by developed states/eurozone members (Australia, Austria, Spain, Greece, Italy, Japan, and Slovenia), with Latvia (an EU member borderline developed state by global banking standards) and Iran the only EM representatives. This is a microcosm of our global view as a whole, which is that banking sectors in most developed states will continue to struggle amid government austerity and household deleveraging, whereas by and large, emerging market banking sectors will continue to expand.

Using comparable data from the IMF (which we use for our global credit aggregate series) going up to the end of 2011, two trends stand out. Firstly, emerging market banking sectors are catching up rapidly to the world's two biggest banking sectors, the US and the eurozone, in terms of lending growth. Since the global financial crisis began in 2007, it is clear that the US and eurozone combined have lagged the rest of the world in credit creation. In fact, while several emerging market economies continue to set new domestic records for credit outstanding, the US plus the eurozone have gone basically nowhere for three years, as the accompanying chart shows. In fact, credit in the US plus eurozone has fallen from an estimated 54% of all global credit to around 46%, a downward trend which we see continuing in the years ahead.

Vietnam Commercial Banking Report Q3 2012

US And Eurozone Back In The Minority For Global Credit Global Credit Aggregates (US$bn)

Minority For Global Credit Global Credit Aggregates (US$bn) Source: IMF, BMI Secondly, between the US and

Source: IMF, BMI

Secondly, between the US and eurozone, we are more optimistic that the US is past the worst. There are significant risks that despite ECB intervention, credit growth in the eurozone is likely to continue to deteriorate. Of course, there is a great deal of differentiation between credit aggregates in different euro area members, with troubled countries such as Ireland, Greece and Spain experiencing major credit contractions, while France and Germany among others are still posting fairly strong numbers. But on the whole, eurozone credit growth is negative and heading lower. Here is a chart of year-on-year consumer credit growth in the US and eurozone. While this should be taken with the caveat that US consumer lending includes government-subsidised student loans, the US appears to have turned the corner in overall consumer credit, whereas we expect further stagnation in the eurozone.

Vietnam Commercial Banking Report Q3 2012

US Consumer Lending Turning The Corner? US v Eurozone Consumer Credit (% chg y-o-y)

The Corner? US v Eurozone Consumer Credit (% chg y-o-y) Source: Eurostat, Federal Reserve, BMI While

Source: Eurostat, Federal Reserve, BMI

While US mortgage lending continues to be a sore point in the US economy as deleveraging continues, it appears that the contraction has steadied at around -2% y-o-y. This should head higher in a few years' time. In contrast, eurozone mortgage lending has been healthy by comparison, but is beginning to slow rapidly (down from 5.0% y-o-y in early 2011 to 2.0% in Q411).

Vietnam Commercial Banking Report Q3 2012

Both Could Be Negative Soon US v Eurozone Mortgage Credit Outstanding (% chg y-o-y)

US v Eurozone Mortgage Credit Outstanding (% chg y-o-y) Source: Eurostat, Federal Reserve, BMI Finally, looking

Source: Eurostat, Federal Reserve, BMI

Finally, looking at corporate debt growth as well, the US has the advantage. Interestingly, the data indicate that European corporates are looking increasingly to debt instrument issuance as opposed to bank lending for financing, which plays up the contrast between healthy corporate balance sheets and weak banks.

Vietnam Commercial Banking Report Q3 2012

US Corporates Have The Edge US v Eurozone Corporate Credit (% chg y-o-y)

Have The Edge US v Eurozone Corporate Credit (% chg y-o-y) Source: Eurostat, Federal Reserve, BMI

Source: Eurostat, Federal Reserve, BMI

Our overarching view is that further weakness is ahead for European banks, while US financial institutions are in better shape going forward. Overall global credit growth will continue to be driven by non-eurozone and US institutions, however, led by emerging markets. That view comes with the caveat that within EM, selectivity is key, and a further downturn in either the US or European banking systems would reverberate globally.

Emerging Markets Regional Overviews Emerging Asia: In 2012 we expect weaker earnings, hampered by foreign funding constraints, slower credit growth, and higher non-performing loans. One corollary of the surge in credit growth seen in 2010 and 2011, and the inevitable slowdown in 2012, will be a resurgence in non-performing loans (NPLs). Our core view is for a sharp slowdown in real GDP growth across the board this year, lead by a hard landing in China and a slowdown in trade growth driven by a recession in the eurozone. These factors alone are likely to lead to an uptick in NPLs. However, when we combine this with the impact of weakening housing markets across the region and tighter availability of credit, the impact on NPLs is likely to be exacerbated. We look for the likes of China, Hong Kong, and Australia to see a surge in bad debts in 2012.

Emerging Europe: We maintain our wary view towards Central and Eastern European (CEE) banking sectors on the back of continued macroeconomic and financial headwinds emanating from the eurozone sovereign debt crisis. We also hold to our preference for the Czech Republic and Poland's banking sectors

Vietnam Commercial Banking Report Q3 2012

on the grounds of stability and growth potential, respectively, while reaffirming our negative outlook for the Hungarian and Ukrainian banking. We also caution that Southeastern European banking sectors are showing some worrying risk indicators.

Things Could Get Much Worse Hungary – Non-Performing Loan Data

Could Get Much Worse Hungary – Non-Performing Loan Data Source: BMI, Magyar Nemzeti Bank Latin America:

Source: BMI, Magyar Nemzeti Bank

Latin America: We believe asset and loan growth will remain strong in 2012, driven by stable fundamentals and the use of monetary stimulus in those markets where credit cycles are slowing. In addition, we do not view the prevalence of European banks operating in the Latin American region as a risk to regional banking sector stability. Indeed, those sectors which have greater foreign participation tend to be the most attractive from a growth perspective, with any serious threats to sector stability coming mainly from domestic factors.

Vietnam Commercial Banking Report Q3 2012

Some Sectors Have Plenty Of Room To Catch Up Latin America – Client Loans Per Capita, US$

To Catch Up Latin America – Client Loans Per Capita, US$ Source: BMI, SBIF, BCB, SFC,

Source: BMI, SBIF, BCB, SFC, CNBV

Sub-Saharan Africa: The outlook for the South African, Nigerian, Kenyan and Ghanaian banking sectors is mixed. We see Nigeria and Ghana as having the strongest growth potential over the coming year, while South Africa should see slow but stable expansion, and Kenya will likely struggle amid various macroeconomic challenges.

Vietnam Commercial Banking Report Q3 2012

Multi-Year Deleveraging For Some MENA – Loan-to-GDP, %

Multi- Year Deleveraging For Some MENA – Loan-to-GDP, % Source: BMI, central banks Middle East And

Source: BMI, central banks

Middle East And North Africa: Financial institutions in Qatar and Oman are likely to outperform over the coming quarters, with growth in the latter supported in large part through the long awaited introduction of Islamic banking to the country. In contrast, risks to underlying stability remain pronounced in Iran and Egypt, with banks in the former effectively frozen out of the international financial system as a result of Western sanctions.

Vietnam Commercial Banking Report Q3 2012

Asia Outlooks

Trade Finance Growth Set To Slow

BMI View: FX denominated loans have flourished across Asia over the past year as regional banks have taken up the slack amid eurozone retrenchment and still-strong corporate demand. While this has been a major boost to profits throughout the industry, the failure of FX deposits to keep up with loans has left a worryingly large loan-to-deposit overhang. As such, funding costs are likely to rise, which will weigh on margins, and there are growing risks in the event of a deterioration in US financial conditions. That said, regional central banks are as flush as ever with US dollars, and swap lines are in place, meaning that a collapse in trade financing is unlikely.

In our Q112 Asia Banking Sector report, we highlighted three risks to the outlook for Asian banks. Foreign funding constraints, slowing credit growth, and rising non-performing loans (NPLs) continue to cloud the outlook for Asian banking sector profits in 2012, and the performance of equities. So far, we have started to see signs of a slowdown in credit growth on the whole. However, one area that continues to show robust growth is trade financing. With European banks retrenching en masse amid sovereign concerns within the eurozone, Asian banks have stepped in to fill the void left in the trade finance market as corporates have looked to take advantage of low US dollar interest rates versus local currency rates. As a result, FX loans have proliferated over the past year, resulting in strong profit growth, but also a growing asset-liability mismatch.

Vietnam Commercial Banking Report Q3 2012

Booming Growth Figures Asia – FX Loan Growth Across Asia In 2011

Growth Figures Asia – FX Loan Growth Across Asia In 2011 Source: BMI, Regional Central Banks

Source: BMI, Regional Central Banks

Asia Eating Into Europe's Dominance The trade finance market, estimated to be worth as much as US$10trn a year globally, and supporting in excess of 80% of global trade, has traditionally been dominated by European banks, which up until recently held a dominant market share. With European banks deleveraging and trying to improve their capital adequacy ratios amid sovereign default concerns, Asian banks have been keen to pick up the slack, given the relatively low risk nature of the industry and the strong growth in intra-Asian trade seen over recent years.

According to Dealogic, three of the region's top five providers of trade finance by market share in Q112 were Asian. This compares with only one of the top five a year ago. Not only has strong trade growth over recent years driven a trade finance boom, but they have been positively reinforcing each other. One of the reasons global trade flows have held up relatively well despite the ongoing eurozone crisis is the robustness of trade financing in Asia. In the 2008-09 global financial crisis, banking sector instability caused a major pullback from the industry, generating a vicious cycle of deteriorating economic conditions and banking sector stress. The willingness of Asian banks to step in to fill the void has been a major supportive factor for regional trade and economic growth. While exports to the euozone have softened in recent months, there has been no material deterioration in intra-Asian trade.

Dealogic data shows that Japanese banks have made a particularly strong leap into the sector, with Mitsubishi UFJ Financial Group now ranking first in the region by market share with 16.6% of the

Vietnam Commercial Banking Report Q3 2012

market in the first quarter, up from just 5.5% last year, while Sumitomo Mitsui Financial Group has more than doubled its market share to 9.6%. Singaporean banks are also expanding rapidly in this area, with DBS reporting that trade finance accounted for half of its loan growth last year.

Worryingly High Loan-to-Deposit Mismatch As we mentioned in our previous banking sector report, however, this lending boom has meant that Asian banks are now sitting on very high FX loans to deposit ratios. For the region as a whole we estimate the total FX loans-to-deposit ratio is in excess of 100% as a result of double-digit FX loan growth in 2011. This makes short-term funding, mainly in US dollars, crucial to keeping these loan levels elevated, and here the risks are noteworthy. These concerns were recently highlighted by Moody's, which cautioned about the growing asset-liability mismatch. In our view, we could see funding costs rise for Asian banks given the growing dollar demand, particularly if we begin to see signs of credit stress develop in the US banking sector. Indeed, with Asian banks using swap agreements with their US counterparts to fund lending, a rise in swap spreads represents a major risk. This is likely to weigh on margins and also lead to a slowdown in FX lending over the coming months. Furthermore, while we are bullish towards Asian FX in the near term, we continue to see weakness across the region in H212, which would raise the local currency value of borrowings, making it more difficult to meet loan repayments.

Large FX Loan Overhang Asia – Loan-to-Deposit Ratios And FX Loan Growth

Overhang Asia – Loan-to-Deposit Ratios And FX Loan Growth Source: BMI On the whole, Asian external

Source: BMI

On the whole, Asian external balance sheets are in good health, with most countries in the region holding more international reserves then prior to the global financial crisis. As such, US dollars would be readily available from central banks in the event that dollar funding dries up. The potential for a re-opening of the

Vietnam Commercial Banking Report Q3 2012

swap lines between Asian central banks and the US Federal Reserve, which were established in the depths of the financial crisis, also means that a large-scale freeze in lending is unlikely, notwithstanding the potential for funding channels to become tighter as 2012 progresses.

Vietnam Commercial Banking Report Q3 2012

Asia Banking Sector Forecast Overview

Table: Banks' Bond Portfolios 2011

 

Bond Portfolio, US$bn

Bond as % total assets

Year-on-year growth %

Bangladesh*

16.6

23.0

8.2

China

1,810.1

11.0

10.0

Hong Kong

350.0

19.8

3.4

India

282.8

22.3

8.4

Indonesia*

14.9

4.6

-1.1

Japan

3,408.3

30.8

7.5

Malaysia*

68.2

14.0

15.7

Pakistan*

21.8

28.4

26.7

Philippines*

37.2

26.4

9.2

Singapore*

73.3

12.0

-1.1

Sri Lanka

2.2

12.8

22.2

South Korea*

266.1

17.4

14.0

Taiwan*

192.7

16.8

40.2

Thailand*

60.6

15.5

7.6

Vietnam*

10.5

6.9

28.4

United States

450.5

3.6

-14.5

Source: Central banks, regulators, BMI, *Only 2010 data available

Vietnam Commercial Banking Report Q3 2012

Table: Asia Commercial Banking Business Environment Ratings

Limits of Potential Returns

Risks to Potential Returns

Overall

 

Market

Country

Market

Country

Structure

Structure

Risks

Risks

Rating

Ranking

Bangladesh

50.0

45.0

43.3

44.0

46.7

52

China

93.3

55.0

63.3

74.0

75.5

13

Hong Kong

76.7

92.5

73.3

84.0

82.0

6

India

83.3

57.5

60.0

56.0

68.4

28

Indonesia

76.7

65.0

80.0

52.0

69.4

26

Japan

33.3

77.5

66.7

80.0

58.1

37

Malaysia

73.3

80.0

83.3

80.0

77.6

10

Pakistan

40.0

50.0

53.3

42.0

44.8

55

Philippines

50.0

62.5

60.0

58.0

56.1

44

Singapore

53.3

95.0

96.7

90.0

76.8

11

Sri Lanka

20.0

55.0

33.3

46.0

36.1

58

South Korea

80.0

82.5

83.3

76.0

80.4

8

Taiwan

76.7

72.5

86.7

76.0

76.6

12

Thailand

63.3

65.0

86.7

74.0

68.5

27

Vietnam

70.0

55.0

36.7

46.0

57.5

40

United States

90.0

85.0

100.0

80.0

88.0

2

Scores out of 100, with 100 the highest. Source: BMI

Vietnam Commercial Banking Report Q3 2012

Table: Comparison of Loan/Deposit & Loan/Asset & Loan/GDP ratios

 

Loan

Loan/

Loan/

deposit

Asset

GDP

ratio %

Rank

Trend

ratio %

Rank

Trend

ratio %

Rank

Trend

Bangladesh

95.3

33

Falling

67.2

11

Falling

51.6

41

Rising

China

68.3

55

Falling

52.1

41

Falling

118.1

13

Falling

Hong Kong

66.9

57

Rising

37.0

58

Rising

263.9

2

Rising

India

75.7

49

Rising

58.6

37

Rising

46.4

46

Rising

Indonesia

80.0

44

Rising

60.1

31

Falling

29.7

53

Rising

Japan

70.6

52

Falling

49.8

46

Falling

90.4

21

Rising

Malaysia

78.8

47

Falling

58.1

36

Falling

120.4

10

Rising

Pakistan

68.6

60

Falling

50.4

50

Falling

22.2

57

Falling

Philippines

67.3

53

Rising

49.7

42

Rising

33.3

52

Rising

Singapore

91.4

38

Rising

49.0

47

Rising

125.5

11

Rising

Sri Lanka

80.7

48

Rising

61.1

26

Rising

29.1

54

Rising

South Korea

113.6

18

Falling

70.6

9

Falling

99.0

16

Falling

Taiwan

74.2

50

Falling

60.2

29

Falling

152.2

6

Rising

Thailand

108.9

22

Rising

66.0

16

Rising

81.2

26

Rising

Vietnam

113.9

10

Rising

83.1

1

Falling

121.4

9

Falling

United States

111.1

20

Falling

75.1

4

Falling

62.9

33

Falling

Source: Central banks, regulators, BMI

Vietnam Commercial Banking Report Q3 2012

Table: Anticipated Developments in 2012

 

Deposit

 

Loan/Deposit

Loan Growth,

Growth,

Residual,

Ratio, %

Trend

US$bn

US$bn

US$bn

Bangladesh

95.6

Rising

10.2

10.5

-0.3

China

68.3

Falling

461.4

675.0

-213.7

Hong Kong

66.9

Falling

19.2

28.7

-9.5

India

75.7

Falling

193.9

256.2

-62.3

Indonesia

82.0

Rising

54.4

58.7

-4.3

Japan

69.6

Falling

167.7

357.6

-189.8

Malaysia

78.4

Falling

27.8

37.3

-9.5

Pakistan

60.9

Falling

-1.4

6.8

-8.2

Philippines

69.2

Rising

4.2

3.1

1.1

Singapore

90.2

Falling

29.4

37.6

-8.2

Sri Lanka

78.4

Falling

0.4

1.1

-0.7

South Korea

111.5

Falling

39.1

53.3

-14.2

Taiwan

75.2

Rising

21.7

15.7

6.1

Thailand

108.4

Falling

2.3

3.3

-1.0

Vietnam

119.8

Rising

31.6

20.2

11.4

United States

108.5

Falling

569.1

725.6

-156.6

NB Incorporates estimated economic data and projected banking data. Source: Central banks, regulators, BMI

Vietnam Commercial Banking Report Q3 2012

Table: Comparison of Total Assets & Client Loans & Client Deposits (US$bn)

2011

2010

 

Total

Client

Client

Total

Client

Client

Assets

Loans

Deposits

Assets

Loans

Deposits

Bangladesh

73.8

49.6

52.0

72.2

48.9

50.8

China

16,477.9

8,588.8

12,567.0

14,592.6

7,606.2

11,129.1

Hong Kong

1,769.2

654.1

977.4

1,581.2

543.9

882.8

India

1,267.6

742.3

980.7

1,275.6

725.8

1,005.0

Indonesia

404.7

243.2

304.1

322.1

196.7

260.5

Japan

11,067.4

5,506.2

7,800.1

10,039.1

5,149.0

7,142.4

Malaysia

541.2

314.2

398.8

485.7

286.1

361.0

Pakistan

87.1

43.9

61.4

76.8

46.0

56.7

Philippines

149.4

74.2

110.3

140.7

64.8

103.5

Singapore

662.4

324.3

354.7

609.0

251.5

338.0

Sri Lanka

27.4

16.7

20.7

23.1

13.1

17.6

South Korea

1,532.5

1,081.9

952.1

1,527.1

1,083.3

915.9

Taiwan

1,147.6

690.6

931.1

1,147.1

690.3

913.1

Thailand

411.5

271.4

249.3

391.1

247.8

245.3

Vietnam

172.7

143.6

126.1

151.5

127.0

113.3

United States

12,622.7

9,484.3

8,537.0

11,884.0

9,256.1

7,971.5

Source: Central banks, regulators, BMI

Vietnam Commercial Banking Report Q3 2012

Table: Comparison of US$ Per Capita Deposits (2011)

 

Client Deposits,

Rich 20% Client Deposits, per capita

Poor 80% Client Deposits, per capita

 

GDP Per Capita

per capita

Bangladesh

734

330

1,383

86

China

5,260

6,374

37,303

2,331

Hong Kong

34,728

91,839

548,918

34,307

India

1,503

598

3,160

197

Indonesia

3,492

1,004

5,020

314

Japan

46,440

43,528

246,648

15,416

Malaysia

9,357

10,887

55,273

3,455

Pakistan

1,130

248

1,390

87

Philippines

2,374

783

4,650

291

Singapore

49,828

62,513

273,451

17,091

Sri Lanka

2,812

795

3,940

246

South Korea

23,639

22,357

78,696

4,919

Taiwan

20,156

29,752

160,447

10,028

Thailand

5,046

3,961

14,554

910

Vietnam

1,357

1,617

5,679

355

United States

48,190

30,293

109,070

6,817

Source: Central banks, regulators, BMI

Vietnam Commercial Banking Report Q3 2012

Table: Interbank Rates and Bond Yields

3 Month Interbank Rate %

 

Current Account % of GDP, 2011f

Budget balance % of GDP, 2011f

End Q1 2012

Bangladesh

0.9

-4.1

n/a

China

2.9

-1.9

1.50

Hong Kong

5.0

3.3

0.33

India

-3.5

-8.8

11.50

Indonesia

0.2

-1.7

4.10

Japan

2.1

-10.6

0.05

Malaysia

11.9

-5.1

3.18

Pakistan

0.1

-6.6

11.60

Philippines

2.6

-2.0

2.88

Singapore

22.1

1.5

0.19

Sri Lanka

-7.8

-6.9

10.50

South Korea

2.3

1.0

3.53

Taiwan

8.8

-3.0

0.84

Thailand

3.4

-3.1

3.02

Vietnam

-4.7

-2.6

12.50

United States

-3.1

-8.6

NB Incorporates actual financial markets data; estimated economic data and projected banking data. na=not available. Source: Central banks; regulators; BMI

Vietnam Commercial Banking Report Q3 2012

Vietnam Specific Banking Sector Outlook

Assessing The Risks Behind Vietinbank's Debt Issue

BMI View: We believe that Vietinbank's successful debt issue could pave the way for more issuances by other Vietnamese commercial banks over the coming years. Our assessment suggests that a relatively high degree of leverage, which could amplify the risk of default, explains the 329 basis points premium on the bank's bonds over sovereign bonds. However, we believe that concerns over a future default by CTG are largely unjustified, presenting an attractive opportunity for investors.

The Vietnam Commercial Bank for Industry and Trade (CTG), also known as Vietinbank, has successfully issued US$250mn worth of US dollar-denominated debt in the international market, with an annual coupon rate of 8.25% maturing in 2017. Judging from the positive response by foreign investors in taking up the first international debt issue by a Vietnamese financial institution, we believe that this could pave the way for more issuances by other Vietnamese commercial banks over the coming years.

Most Profitable In The Group Vietnam – Net Interest Margins, %

Profitable In The Group Vietnam – Net Interest Margins, % Source: BMI, Bloomberg Improving Macroeconomic Fundamentals

Source: BMI, Bloomberg

Improving Macroeconomic Fundamentals Given that recent economic data coming from Vietnam is beginning to reflect our core view of a turning point in the country's macroeconomic fundamentals, we believe that the Vietnamese debt market will become increasingly attractive to foreign investors. Despite our bullish outlook on the economy, which suggests that CTG's bonds presents a compelling opportunity for investors, we still believe that it is

Vietnam Commercial Banking Report Q3 2012

worthwhile to assess the underlying risks associated with CTG's latest debt issue. Furthermore, our conviction that the State Bank of Vietnam (SBV) will introduce another 200 basis points (bps) worth of rate cuts by the end of the year, although this has largely been priced into bond yields, should generally be positive for fixed-income assets.

From a bondholder's perspective, the risk of a potential default is the sole reason associated with the 329 basis points (bps) premium that CTG's newly issued bonds is currently yielding over its most comparable Vietnamese government US dollar bond (at the time of writing, CTG's bonds were yielding 8.69%, compared to 5.40% on sovereign bonds). Indeed, the mismanagement of state-owned enterprise (SOE) Vietnam Shipbuilding Industry Group, which almost brought the company to the brink of bankruptcy in 2010, has severely undermined investors' confidence. Not surprisingly, rating agency Moody's Investors Service has assigned a B1 long-term rating on CTG's debt, categorising the issue as 'speculative' and 'subject to high credit risk' while Standard and Poor's has assigned a B+ rating, implying 'significant speculative characteristics'.

Quality Of Loans A Priority Vietnam – Non-Performing Loans To Total Assets, %

Vietnam – Non-Performing Loans To Total Assets, % Source: BMI, Bloomberg Fears Of A Potential Default

Source: BMI, Bloomberg

Fears Of A Potential Default Overdone Although we do acknowledge that the risk of default by Vietnamese commercial banks is certainly greater in comparison to other emerging market commercial banks in South East Asia, we believe that concerns over a future default by CTG may have been overpriced by the bond market, presenting attractive opportunities for investors with a greater risk appetite. There are several reasons why we see concerns of a future default by CTG as largely unjustified. Firstly, the Vietnamese government is financially capable

Vietnam Commercial Banking Report Q3 2012

and very likely to intervene in the event of default concerns, especially given the relatively small size of CTG's latest debt issue. Secondly, policymakers are fully aware that a gradual privatisation of state- owned banks through share issues (the SBV presently holds a 83% stake in CTG's equity) and efforts to speed up development of the debt market, are essential to the Vietnamese government's long term economic development goals. Therefore, the government has an incentive to ensure that foreign investors who participated in the early stages of the banking sector's privatisation will do relatively well.

Higher Leverage Higher Risks Vietnam – Average Assets To Average Equity Ratio

Risks Vietnam – Average Assets To Average Equity Ratio Source: BMI, Bloomberg In A Better Shape

Source: BMI, Bloomberg

In A Better Shape Compared To Its Peers CTG's fundamentals are also much better in comparison to its industry peers from a bondholder's perspective. In terms of the quality of CTG's loan portfolio, non-performing loans (NPL) as a share of total assets have remained relatively stable in recent years, averaging 0.6% since mid-2009. More importantly, CTG's NPL ratios have remained relatively low in comparison to its peers (see chart). We note that this is despite a rapid expansion in the company's loan portfolio, which grew by 25% in 2011 according to its 2011 annual report, while loans for the whole banking sector grew by around 13%. Meanwhile, CTG is also the most profitable among its peers, enjoying a strong net interest margin (NIM) of 5.3%. Looking at CTG's assets-to-equity ratio, however, we note that the bank is the most leveraged among its peers with average total assets currently at 16.6 times the size of average total equity in 2011.

Our assessment suggests that a relatively high degree of leverage, which amplifies the risk of default, explains the 329bps premium on CTG's bonds. However, we remain convinced that fears over the risk of default are largely unjustified, thus providing a compelling opportunity for investors. A key risk to our

Vietnam Commercial Banking Report Q3 2012

outlook would lie in a sudden pick up in NPLs should we see a larger-than-expected increase in bankruptcies over the coming months, which could dent investor sentiment towards the health of the company's fundamentals in the short term. Over the longer term, however, our bullish outlook on Vietnam, which is supported by structural macroeconomic improvements in the country, means that we are optimistic towards the performance of CTG's debt and we expect yields to fall over the coming years.

Vietnam Commercial Banking Report Q3 2012

Economic Outlook

Deteriorating Economic Data Prompts Growth Downgrade BMI View: Recent economic data suggest that the outlook for Vietnam's economic growth has deteriorated significantly in recent months. Furthermore, the State Bank of Vietnam (SBV)'s indication that it will normalise interest rates only by Q412 (we were expecting that the monetary easing cycle would be fully completed by Q312), means that credit conditions will remain tight throughout the year. Consequently, we have downgraded our real GDP growth forecast from 5.8% to 5.2% for 2012.

Recent data suggest that economic activity will continue to moderate over the coming quarters, presenting significant downside risks to our already below consensus forecast of 5.8% for real GDP growth in 2012. The State Bank of Vietnam (SBV)'s monetary easing cycle is also turning out to be less aggressive than we have anticipated. SBV governor Nguyen Van Binh announced during a press conference on April 11 that the central bank is planning to cut its policy rate (refinancing rate) by 100 basis points (bps) every quarter towards the end of the year. Although this is largely in line with our core view that the SBV will normalise interest rates by introducing 400bps of rate cuts in 2012 (the SBV has already introduced 200bps worth of rate cuts since the beginning of the year), we were previously expecting that the monetary easing cycle would be fully completed by Q312. Given the SBV's latest indication to gradually unwind its tight monetary policy and to normalise interest rates only by Q412, we are revising down our expectations for Vietnam's economic growth. We now expect real GDP growth to come in at a slightly more subdued 5.2% for 2012 (down from our previous forecast of 5.8%).

Industrial Production And Manufacturing Sector Growth Slow Looking at industrial production data, we note that there is conclusive evidence of a sustained slowdown in production activity since the SBV introduced a wave of aggressive monetary policy measures aimed at cooling the economy in 2011. Industrial production expanded at just 6.5% year-on-year (y-o-y) in March, compared with an average 8.8% over the past six months and average 10.4% over the past 12 months. The slowdown in industrial activity since the beginning of the year has also been confirmed by a significant decline in manufacturing sector growth, which came in at a weak 4.9% y-o-y in Q112, compared to 10.0% in Q411. We believe that this is partly due to cooling external demand for new manufacturing orders, a trend that is also evident in neighbouring manufacturing export-oriented economies such as Thailand and Malaysia. Given that the manufacturing sector makes up a significant 21.7% share of Vietnam's GDP and that tight credit conditions (average lending rates remain exceptionally high at around 14-16%) will continue to be a major drag on manufacturing sector growth, we believe that headline growth will come in significantly below Bloomberg consensus of 6.0%.

Outlook For Private Consumption Looking Weak Turning to other economic indicators, we note that latest retail sales and domestic vehicle sales data

Vietnam Commercial Banking Report Q3 2012

remain relatively weak. While retail sales grew at a 27-month low of 21.8% y-o-y in March, domestic vehicle sales contracted for the sixth consecutive month at -21.4% y-o-y. These figures reinforce our view that uncertainties over unemployment in the manufacturing sector and corporate earnings will prompt households and businesses to cut back on spending and investment, resulting in overall weak domestic demand growth over the coming months. We also note that according to figures published by the Ministry of Planning and Investment (MPI), around 12,000 enterprises in Vietnam have either declared bankruptcy or completely went out of business as of Q112. We expect this surge in bankruptcies to result in a higher unemployment rate over the coming months, which should put further downside pressure on household spending.

Corporate Tax Cut Unlikely To Boost Investment In terms of our outlook on Gross Fixed Capital Formation (GFCF) growth, we believe that the government's plan to slash corporate income tax by 30% for small- and medium-sized enterprises (SMEs) is unlikely to have a significant impact on private sector investment. Given an abundant stock of spare capacity due to the large number of bankruptcies in recent months and a much more moderate outlook for economic growth ahead, we believe that large companies will delay investing in new projects over the coming months. Furthermore, the government's newly announced tax cut will only apply to SMEs, which tend to be more conservative towards expanding production during periods of economic uncertainties due to their relatively weak balance sheets and cash flows in comparison to multi-national companies. Accordingly, we expect GFCF growth to remain at a relatively subdued 5.0% in 2012.

Public Spending To Increase In Bid To Support Economy There is increasing evidence that total public expenditure will exceed the government's allocated budget this year. According to a statement published by the Ministry of Planning and Investment, the National Assembly is expected to approve an additional VND4.5trn (US$0.2bn) in funds to be spent on five new infrastructure projects including two bridges, a university dormitory and an oncology hospital. We note that that this will add to a healthy pipeline of infrastructure projects that already in the construction phase and are expected to be completed over the coming years. The government has also pledged to maintain welfare subsidies in response to a challenging economic outlook in 2012. These factors suggest to us that public spending will still grow at a robust pace of 5.6% this year, albeit lower in comparison with 5.9% in 2011. Nonetheless, this should provide some support for overall headline growth in 2012.

Still Expecting A Trade Deficit The latest figures published by the General Statistics Office showed a mild trade surplus of US$0.4mn in March, compared with an average monthly trade deficit of US$0.7mn in 2011. We expect trade import growth to cool further in 2012 as Vietnamese manufacturers cut back on intermediate goods imports, in line with our outlook for subdued production activity and moderating economic growth throughout the year. However, we continue to see external demand remaining subdued in the months ahead and we expect new exports orders to remain stagnant in 2012. This should in turn lead to an overall slowdown in

Vietnam Commercial Banking Report Q3 2012

net exports. Accordingly, we see net exports growing at just 6.0% in 2012, significantly lower compared with 16.9% in 2011.

Scope For Early Rate Cuts Recent economic data reinforce our core view of a moderation in Vietnam's real GDP growth from 5.9% in 2011 to 5.2% in 2012 and that inflationary pressure should continue to wane on the back of cooling economic activity. The recent round of weak economic data should, however, give the SBV more scope for early rate cuts in Q312 rather than taking its monetary easing cycle late into the final quarter. Nonetheless, given that it will take around six to eight months for the effects of the SBV's monetary policy to fully feed through to the economy, this means that we will only see a pickup in economic activity in H113. Accordingly, we would consider revising our real GDP growth for 2013 upwards should we see signs of a robust economic recovery taking place towards the end of the year. Over the longer term, we remain bullish on Vietnam's attractive growth story and we believe that the government's renewed focus on maintaining macroeconomic stability will be positive for investor confidence and economic growth.

Table: Vietnam – Economic Activity, 2011-2016

 

2011e

2012f

2013f

2014f

2015f

2016f

Nominal GDP, VNDbn 2

2,487,631.9

2,847,455.0

3,192,260.2

3,609,813.5

4,068,807.3

4,588,126.0

Nominal GDP, US$bn 2

120.4

135.4

153.5

175.5

200.1

228.3

Real GDP growth, % change y-o-y

2

5.9

5.2

6.5

7.2

7.3

7.4

GDP per capita, US$ 2

1,357

1,509

1,693

1,917

2,165

2,447

Population, mn 3

88.8

89.7

90.7

91.6

92.4

93.3

Industrial production index, % y-o-y, ave 1,4

10.9

8.0

12.0

14.0

13.0

12.0

Unemployment, % of labour force, eop 4

4.5

5.0

4.8