VPBank CEO outlines policy responses and growth prospects amidst economic challenges

Vinh highlighted the substantial strategic efforts deployed by the State Bank of Vietnam (SBV) during H1/2023, particularly in implementing robust monetary policies and support initiatives that align with the government's directives.

He asserted, "The SBV has achieved significant milestones, particularly in maintaining monetary stability, securing exchange rates, and implementing a progressive interest rate reductions over time."

Vinh stressed that these monetary policies represent a considerable effort to bolster the market, support the populace, and alleviate the pressures currently experienced by Vietnamese enterprises.

Some circulars and decrees pertinent to bonds, along with the recent regulations permitting an increase in banks' credit limits up to 14-15 per cent, have facilitated a smoother operational process for both businesses and banks.

Drawing on these trends, Vinh exuded a sense of optimism for positive economic transformation in the coming quarters, attributing this to the government's strategic macro-management directives.

He stated, "The expectation is that these stimulatory policies will instigate gradual changes in Q3 and Q4, thereby laying the foundation for sustained growth."

VPBank, alongside other financial institutions, has demonstrated its commitment to supporting the national economy by accepting profit reductions.

Vinh futher revealed that the bank had seen its profits decline by over VND1 trillion ($41.7 million), a reduction of 2-3 per cent, while major institutions like BIDV have faced profit contractions exceeding VND2 trillion ($83.3 million).

Furthermore, Vinh signalled that banks, including VPBank, are continually refining their approaches to increase businesses' access to credit, thereby stimulating economic growth.

He also remarked on the importance of consumption stimulation, stating that previous policies focussed primarily on supporting the economy and businesses, without adequately addressing the issue of output.

However, he drew attention to the intractable challenges that the banking sector faces, hurdles which cannot be resolved without a cooperative approach from numerous departments.

"First, when the economy faces difficulties, it has a knock-on effect on businesses, impairing their capacity to meet their credit requirements," Vinh asserted, framing this as a central concern for the sector.

Finally, he called for robust policies to safeguard investors and protect the rights and benefits of banks on a global scale.

He emphasised the need to strengthen the operation of banks and enhance investor confidence amidst the current economic challenges.

Vinh concluded, "Lenders are undoubtedly assuming the most risk. Regulatory bodies have rules on debt collection and debt resolution rights, banks have the prerogative to collect debts, and borrowers have the responsibility to service them."

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