Day: January 11, 2023

The banking industry will continue to face difficulties in 2023 in the context of the real estate market downtrend and the less positive import and export outlook, analysts forecast.

Under a report released recently, Viet Dragon Securities Company (VDSC)’s analysts have said the interest income growth of the banking industry in 2023 will slow due to the impact of low credit growth and a decreasing net interest margin (NIM).

The credit growth target in 2023 is expected at 11-12%, lower than the 15.5-16% rate in 2022. Though the credit growth rates will differ among banks, the negative outlook of the real estate market will cause the credit demand to be lower than in past years.

The NIM decline will differ among banks in 2023, which will cause the growth of interest income of the entire banking industry to stay at less than 11%. Therefore, VDSC believes banks’ interest income will grow slowly in 2023.

The analysts have also projected a high comparative base effect; the customer interest aid programmes and the real estate market difficulties will lessen the non-interest income growth. Accordingly, payment activities will likely decelerate along with credit activities in 2023. Moreover, the tendency of banks to switch to a zero-fee payment programme will also contribute to a decrease in fee income growth.

Besides, the asset investment banking activities, including bonds, will fall in size and profit margin because the bond issuance volume may soon increase again compared to 2022 but will remain lower than that in the booming 2019-21 period due to the Government’s tightened conditions. Improved professional investor standards will make it difficult for banks to find bond buyers.

In addition, the costs of complying with the new provisions of Decree 65/2022/ND-CP prescribing private placement bonds in Vietnam will also increase.

The most important factor is the decline in investor confidence, which will cause the bond market to be continuously tough in 2023.

Therefore, the higher banks have income sources from investment banking operations, the bigger their service fee revenue decline.

Besides, the growth of bancassurance fees will continue to slow due to the lower expected credit growth, the allocation of personal assets to high-interest savings channels, and the saturation of the investment-linked insurance market.

Exceptions may be seen in some banks, such as Lien Viet Post Commercial Joint Stock Bank (LienVietPostBank) and HCM City Development Commercial Joint Stock Bank (HDBank), as the banks will record exclusive fees and the collection of first-year premiums when signing new exclusive contracts for insurance distribution.

The proportion of investment-linked products also cooled down in 2022, while this is the business segment that often contributes the most fee income to banks. The declining trend is forecast to continue in 2023, causing a slowdown in banks’ fee income growth next year.

On this basis, VDSC forecasts banks’ total operating income will grow modestly in the context of decelerating lending activities. Specifically, in the group of banks in VDSC’s watch list, the total operating income in 2023 is expected to grow slowly by 10% over the same period in 2022, when the interest income will rise by 11%, and the fee income growth will cool down to 16%.

Besides, banks’ asset quality is forecast to decline slightly in 2023 while credit expenses will increase moderately by 18%, and the pre-tax profit is expected to go up slightly by 6% compared to 2022.

With the above forecast, VDSC estimates the return on equity (ROE) of banks, in general, will slightly decline in 2023 as Vietnam experiences decreasing economic growth.

However, some banks, which have high provision buffers for risky loans and good asset quality, and are less vulnerable to risky areas, will still maintain a relatively high ROE in 2023 and recover to the average level in 2024.

According to VDSC’s analysts, the banking industry’s asset quality may reduce in 2023 in the downtrend of the real estate sector and the less favourable import and export prospect.

However, the analysts have noted the reduction will differ among banks based on the impacts of corporate bonds and real estate lending. A high provision buffer for risky loans will help some banks, which had prudent policies with the two business segments, avoid the decline in asset quality.

A Q1 2023 business performance survey released this week by the State Bank of Vietnam also showed commercial banks were more cautious when forecasting the coming time. According to the survey, only more than half of banks expect their business performance to improve in 2023, but the improvement is lower compared to 2022./.

Source: Vietnam News Agency

The upcoming official visit to Vietnam by Speaker of the National Assembly of the Republic of Korea (RoK) Kim Jin-pyo from January 12-18 is expected to promote parliamentary cooperation between the two nations in a practical and effective manner, contributing to further deepening bilateral relations.

The visit, which will be made at the invitation of Chairman of the Vietnamese NA Vuong Dinh Hue, is the first official visit to Vietnam by the Speaker since he took office in July 2022, and the first visit to Vietnam by a RoK senior leader after the two countries elevated their bilateral relations to a comprehensive strategic partnership in December last year.

Vietnam and the RoK officially established diplomatic ties on December 22, 1992. The relations have developed strongly and practically on the basis of political trust, cultural similarity, and geographical proximity.

The two sides have maintained good relations in all channels of the Party, the National Assembly, and the Government, with high-level exchanges held regularly in flexible forms.

The two sides issued a declaration to upgrade their relations to a “Comprehensive strategic partnership” on the occasion of the State visit to the RoK by President Nguyen Xuan Phuc in December last year.

Senior leaders of the RoK always affirm that the RoK considers Vietnam a key partner in implementing its foreign policy in Southeast Asia, and its Indo-Pacific strategy.

With this political perception, Vietnam and the RoK have become leading partners in many areas, in which their economic, trade and investment cooperation is both a pillar and also a motivation for pushing up the relations between the two countries.

The RoK ranks first in terms of foreign direct investment (FDI) in Vietnam; second in ODA cooperation, labour and tourism, and third in trade cooperation.

Meanwhile, Vietnam is the biggest economic partner of the RoK in ASEAN, accounting for 30% of investment and 50% of total trade turnover between the RoK and the bloc.

Speaker of RoK NA’s visit to step up bilateral parliamentary cooperation hinh anh 2

Vietnamese President Nguyen Xuan Phuc (L) and his RoK counterpart Yoon Suk-yeol at their talks in Seoul in December 2022. (Photo: VNA)

Leaders of both nations agreed to promote stable growth of bilateral trade turnover in the direction of balance, maintaining their position as leading trading partners, towards lifting the two-way trade to 100 billion USD by 2023, and 150 billion USD by 2030.

People-to-people exchanges have been constantly developing, serving as a solid bridge to foster the Vietnam-RoK relationship.

Particularly, amid difficulties caused by the COVID-19 pandemic, the bilateral cooperation has still developed fruitfully.

The RoK was one of the first countries to donate vaccines and medical equipment to help Vietnam. Meanwhile, Vietnam has created the most favourable conditions for Korean enterprises’ production and business activities in the country.

The relationship between the two countries’ legislative bodies has been actively consolidated and developed in the spirit of the Cooperation Agreement signed in 2013, significantly contributing to strengthening the bilateral relations between the two countries.

The two sides have regularly maintained meetings; online talks; and exchange of delegations of the National Assemblies, and friendship parliamentary groups.

Notably, the official visit to the RoK by Vietnamese NA Chairman Vuong Dinh Hue in December 2021 contributed to further deepening the Vietnam – RoK relations across many fields, especially promoting post-pandemic economic recovery and development in both countries.

During the visit, leaders of the two countries’ legislative bodies agreed to develop relations into a model of parliamentary cooperation by establishing groups of friendship parliamentarians, and female and young parliamentarians.

The two NAs agreed to closely cooperate and support each other in international and regional inter-parliamentary forums such as the International Parliamentary Union (IPU), the Asia-Pacific Parliamentary Forum (APPF), the Asia-Europe Parliamentary Partnership (ASEP), the Meeting of Speakers of Eurasian Countries’ Parliaments (MSEAP) and the ASEAN Inter-Parliamentary Assembly (AIPA).

Attention will be paid to promoting the connections of parliamentary groups, and enhance exchanges of delegations and sharing of information on parliamentary activities in each country./.

Source: Vietnam News Agency

Prime Minister Pham Minh Chinh made a courtesy call on General Secretary of the Lao People’s Revolutionary Party and President of Laos Thongloun Sisoulith in Vientiane on January 11.

Welcoming the first official visit to Laos by Chinh as the Government leader of Vietnam, the host highly valued the two Governments’ efforts to continue developing bilateral cooperation in a substantive and effective manner.

He voiced his belief that important outcomes obtained during the trip will help both sides successfully carry out the Vietnam – Laos cooperation strategy for 2021 – 2030, the agreement on bilateral cooperation for 2021 – 2025, and agreements between the two Governments.

For his part, PM Chinh affirmed Vietnam always treasures and gives the top priority to the great friendship, special solidarity, and comprehensive cooperation with Laos, and considers these as priceless assets holding strategic importance to the countries’ revolutions.

He noted the two sides agreed to work together to effectively implement high-level agreements; keep bringing into play the traditional cooperation and mutual trust in terms of politics, defence, and security; and continually improve the quality and effectiveness of cooperation between Party commissions, ministries, sectors, agencies, and organisations of Vietnam and Laos.

They will also push ahead with economic, trade, and investment ties; assist each other to build independent and self-reliant economies that extensively and effectively integrate into the world; and stay steadfast in the path to socialism, according to the Vietnamese leader.

At the meeting, General Secretary and President Thongloun Sisoulith also shared the view that the two sides should actively make use of the results of the Vietnam – Laos Solidarity and Friendship Year 2022 so as to boost communications about the special relations, especially among young people./.

Source: Vietnam News Agency

Chairman of the National Assembly (NA) Vuong Dinh Hue visited and offered Tet (Lunar New Year) greetings to officers and soldiers of armed forces in the Mekong Delta province of An Giang on January 11.

The top legislator applauded efforts by local armed forces to fulfil their political tasks which, he said, greatly helped An Giang successfully perform socio-economic development, defence, and security safeguarding duties, among others, in 2022.

He asked the provincial Military Command to be fully aware of the especially important position of An Giang in the southwestern region and Vietnam as a whole while thoroughly grasping and effectively implementing the resolutions, conclusions, and directives on military and defence affairs issued by the Party Central Committee, the Politburo, the Central Military Commission, the Ministry of National Defence, and Military Region 9.

The provincial Military High Command was told to improve the capacity of situation analysing, forecasting, and proposal making; properly carry out diplomatic and international cooperation activities; and firmly safeguard national sovereignty and border in the province.

Hue requested stronger coordination with the public security force to defend national security, guarantee social order and safety, and fight against crimes; combat readiness be ensured, especially during the coming Lunar New Year; and active engagement in socio-economic development, natural disaster response, and rescue to help strengthen ties with the people.

On behalf of Party and State leaders, the NA Chairman offered Tet greetings and presented gifts to local armed forces./.

Source: Vietnam News Agency

UK pharmaceutical exports to Vietnam witnessed a strong growth rate of 32% in the first nine months of 2022, according to British Ambassador to Vietnam Iain Frew.

The ambassador was speaking at the workshop ‘UKVFTA commitments and implications for the pharmaceutical sector in Vietnam’ on January 10.

He said under the UK-Vietnam Free Trade Agreement (UKVFTA), UK pharmaceutical companies enjoy lower tariffs, increased access to the public procurement market for pharmaceutical products, and enhanced protection of intellectual property rights in Vietnam.

“UKVFTA has helped deliver regulatory changes that have allowed British pharmaceutical companies to obtain foreign-invested enterprise (FIE) status in the country,” said Iain Frew.

The ambassador expressed his appreciation for the Ministry of Health’s efforts to revise the legal regulations on pharmaceutical registration and management, especially the issuance of Circular 08 which removed additional requirements on the certification of pharmaceutical products.

He also appreciated the decision by the National Assembly to allow the extension of the expired marketing authorisation until 2024. He hoped that the ministry would be able to issue the list of pharmaceutical products under this resolution soon to ensure the continuity of supply and patient treatment.

Do Xuan Tuyen, deputy minister of Health, revealed that the National Assembly had approved a resolution, under which the marketing authorisation (MA) of certain drugs and medicinal ingredients is extended to December 31, 2024.

He said his ministry had been working on the above-mentioned list of pharmaceutical products and would soon publish it to avoid a disruption of medical supply chains.

He also said his ministry had drawn up a revised version of the Law on Pharmacy 2016 and submitted it to the Government for approval. The version offers five big changes to the original law.

One of the changes involves the replacement of five-year-periodically approved extensions of MA by automatic extensions of MA. Another change centres around the reduction of clinical trial requirements in favour of developed countries.

“Another change involves the decentralisation of MA to local pharmaceutical authorities,” said Tuyen.

The deputy minister expected the version to be approved and sent to the National Assembly for discussion in October 2024.

Harry Rawicz-Szczerbo, head of Trade & Investment, British Embassy in Hanoi, underlined several opportunities for UK pharmaceutical products under UKVFTA.

The first opportunity involves preferential tariffs, with more than 71% of UK pharmaceutical products enjoying tariff-free access to Vietnam immediately. The remainder is slated to benefit from tariff elimination in the next four to nine years.

The second opportunity involves the access to Vietnamese public procurement market. After a transitional period of two years from the entry into force of UKVFTA, UK suppliers will secure access to a pre-determined portion of the market.

The third opportunity is about the FIE status. The free trade agreement will allow UK pharmaceutical companies to set up FIE status, which entitles them to build warehouses and facilities, hire health experts, and carry out marketing activities in the country.

The fourth opportunity is the improvements in intellectual property rights. For example, Vietnam will provide regulatory data protection to pharmaceutical products every five years.

“Competitors are prohibited from relying on submitted test data in support of an application for MA for at least five years,” said Rawicz-Szczerbo.

The fifth opportunity centers around clinical trials. Under UKVFTA, Vietnam will withdraw existing clinical trial requirements that are not in line with international norms and standards, including the International Conference on Harmonisation of Technical Requirements for Registration./.

Source: Vietnam News Agency

An official from Vietnam’s Ministry of Public Security (MPS) assumed the position of Director for Plans and Programmes at the ASEAN National Police (ASEANAPOL) Secretariat on January 11.

Sen. Lt. Col. Nguyen Huu Ngoc, deputy division head at the Office of the MPS’s Investigation Police Agency, took over the post at a ceremony held at the ASEANAPOL Secretariat’s headquarters in Kuala Lumpur, Malaysia.

This is the first time a police officer of Vietnam has undertaken an important position in international and regional police organisations.

Ngoc said that to implement the Party and State’s policy on expanding international cooperation in crime prevention and control, over the past years, the Government assigned the MPS to deploy personnel to the General Secretariat of the International Criminal Police Organisation (INTEPOL), the Association of Southeast Asian Nations (ASEAN), and ASEANAPOL Secretariat.

The candidacy for key leadership positions of the ASEANAPOL Secretariat reflects the Vietnamese police force’s strong determination and commitment to boost international cooperation in trans-national crime fight.

He noted by directly managing activities of the ASEANAPOL Secretariat, he can gain necessary experience to prepare for Vietnam to take over the Executive Director position in 2028; help enhance the country’s cooperation with law enforcement forces of regional partners to promote trans-national crime fight; make proposals on cooperation between the Vietnamese police and member countries, dialogue partners, and observers of ASEANAPOL; and help make use of assistance in terms of science, technology, and equipment for the crime combat.

Ngoc told the Vietnam News Agency that he will make all-out efforts to contribute to cooperation among police forces of ASEAN countries to safeguard regional safety and peace, and to the improvement of the Vietnamese police’s role in the region and the world at large.

Founded in 1981, ASEANAPOL comprises police forces of the 10 member countries, namely Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam. Its Secretariat officially opened on January 1, 2010.

The ASEANAPOL is led by the Executive Director who has a two-year term. Meanwhile, the Director for Police Services and the Director of Plans and Programmes have a tenure of two – three years./.

Source: Vietnam News Agency

Vice Chairman of the Ho Chi Minh City People’s Committee Duong Anh Duc on January 11 hosted visiting Treasurer of the Australian state of Victoria Tim Pallas, during which they exchanged directions for the promotion of cooperation between two localities.

Given robustly growing Vietnam-Australia ties, Duc said the city has set up friendship and collaboration ties with many Australian localities, including Victoria in May last year.

Noting that the southern Vietnamese economic hub’s future growth orientations will create more cooperation opportunities with the Australian side, the official suggested HCM City and Victoria complete their plan of actions for joint works with a focus on the fields of investment development, logistics, biotechnology, health care, education, human resources quality improvement, and two-way trade promotion.

Duc expressed his wish to strengthen the sides’ cooperation, exchange and learn from Victoria’s experience in digital transformation, climate change response, start-ups and innovation, and the improvement of staff quality in economic development and public administration.

The two localities should jointly study and select practical and effective contents for 2023 serving the actualisation of their collaboration towards specific goals and mutual benefits, he recommended.

For his part, Pallas, who is also Minister for Industrial Relations and for Trade and Investment of the state, informed the host that his visit to the city – the first on his position as the treasurer and minister – aims to open the Victorian trade and investment representative office here and promote the practical implementation of agreements signed between the sides.

Victoria can learn a lot from Vietnam’s economic growth achievements and is willing to exchange and share experiences for Vietnam and HCM City in areas of its strength, the official affirmed.

Pallas added that his state is among main sponsors of a dialogue programme between leaders of Australia and Vietnam, with the first edition gathering ten Vietnamese and Australian representatives and scheduled for the near future in HCM City. The programme will then be held in Melbourne, the capital of the state of Victoria./.

Source: Vietnam News Agency