Moody’s: strong economic growth in Vietnam will support banks’ operating environment

Moody's Investors Service has changed its 12-18 month outlook on the banking system in Vietnam to stable from positive.

Moody's conclusions are contained in its just-released report on Vietnamese banks titled "Banking System Outlook - Vietnam: Economic growth and improving asset quality support stable outlook." The stable outlook is based on Moody's assessment of six drivers: operating environment (stable); asset risk (improving), capital (stable); funding and liquidity (stable); profitability and efficiency (improving); and government support (stable). With the operating environment, Moody's says that strong economic growth in Vietnam will support the banks' operating environment. Moody's expects Vietnam's real GDP growth to remain one of the strongest in ASEAN, at 6.7% in 2018 and 6.5% in 2019, driven by improved economic competitiveness, exports and domestic consumption. With government support, Moody's says that the Vietnamese government will continue to support the country's banks when needed, mainly in the form of liquidity assistance and forbearance from the central bank.

Source: VOV5