Vietnam Consumer Finance Comprehensive Report 2016
As Vietnam has targeted the credit growth of 18-20% in 2016, banks also expect lending this year to surpass target, some even show optimism by aiming high goal. Since the SBV implemented ‘Restructuring the system of credit institutions in 2011-15' project, NPL ratio of the banking system has declined but the size of NPLs has not been improved significantly.
In scale, Vietnam’s banking assets are still modest compared to regional countries’. The banking system and financial market are developing at a rapid rate, thus improving substantially the market penetration. However, the increase in quantity does not keep up with the advancement in quality.
While large state-owned finance companies are still in the divestment, foreign ones have expanded and dominated the market. In that context, banks are speeding up acquiring finance companies. Many banks even prepare to apply for new finance company license.
Total credit outstanding grows at an average pace of 14% per annum, among which consumer finance part increased considerably from 5.1% in 2013 to 8% in September 2015. Consumer credit started to soar since the end of 2012 and reached an average growth rate of over 34% by the end of Sep 2015.
Consumer finance market in Vietnam is soaring but still considered to be primary compared to other markets. Home purchase, construction and renovation loans and home appliances loans still take up a majority of total consumer loans outstanding in 2015.
The stiff competition still occurs in the market among domestic banks, foreign banks and finance companies. While banks supply large and medium loans with interest rates controlled by the government, the appraisal process in finance companies is more simple and less strict, however the interest rates in these companies are very high.
Among domestic banks, Techcombank and Sacombank still take majority of consumer lending into account, there are also several remarkable newcomers such as TP Bank or HD Bank. However, due to complicated application process in banks, customers still require collaterals over the unsecured loans. Under those circumstances, an accelerating number of commercial banks plan to establish their own finance company, for example: BIDV, VietinBank, MBBank, ACB, Sacombank, NamA Bank, etc.
In order to differentiate themselves in the market, foreign banks mainly focus on middle high customers. Some large banks can be named as HSBC, ANZ or Citibank
Finance companies provide loans with much easier conditions compared to commercial banks, thus the loan portfolio of those companies are riskier, therefore they have to increase their interest rates to compensate the risks. Home Credit, FE Credit, HD Saison and ACS Trading are leading finance companies in the market. Three out of four are foreign-owned, only FE Credit belongs to a Vietnamese entity (VP Bank).
In scale, Vietnam’s banking assets are still modest compared to regional countries’. The banking system and financial market are developing at a rapid rate, thus improving substantially the market penetration. However, the increase in quantity does not keep up with the advancement in quality.
While large state-owned finance companies are still in the divestment, foreign ones have expanded and dominated the market. In that context, banks are speeding up acquiring finance companies. Many banks even prepare to apply for new finance company license.
Total credit outstanding grows at an average pace of 14% per annum, among which consumer finance part increased considerably from 5.1% in 2013 to 8% in September 2015. Consumer credit started to soar since the end of 2012 and reached an average growth rate of over 34% by the end of Sep 2015.
Consumer finance market in Vietnam is soaring but still considered to be primary compared to other markets. Home purchase, construction and renovation loans and home appliances loans still take up a majority of total consumer loans outstanding in 2015.
The stiff competition still occurs in the market among domestic banks, foreign banks and finance companies. While banks supply large and medium loans with interest rates controlled by the government, the appraisal process in finance companies is more simple and less strict, however the interest rates in these companies are very high.
Among domestic banks, Techcombank and Sacombank still take majority of consumer lending into account, there are also several remarkable newcomers such as TP Bank or HD Bank. However, due to complicated application process in banks, customers still require collaterals over the unsecured loans. Under those circumstances, an accelerating number of commercial banks plan to establish their own finance company, for example: BIDV, VietinBank, MBBank, ACB, Sacombank, NamA Bank, etc.
In order to differentiate themselves in the market, foreign banks mainly focus on middle high customers. Some large banks can be named as HSBC, ANZ or Citibank
Finance companies provide loans with much easier conditions compared to commercial banks, thus the loan portfolio of those companies are riskier, therefore they have to increase their interest rates to compensate the risks. Home Credit, FE Credit, HD Saison and ACS Trading are leading finance companies in the market. Three out of four are foreign-owned, only FE Credit belongs to a Vietnamese entity (VP Bank).
Abbreviation
Executive Summary
1. BUSINESS ENVIRONMENT
1.1 Macroeconomic Situation
Figure of GDP growth and CPI, 2010 – 2015
Figure of Foreign investment, 2010 – 2015
Figure of Exchange rates VND/USD, 2010 – 2015
Figure of FX Reserves, 2010 – 2014
Figure of Retail sales, 2010 – 2015
Figure of Disposable income and consumer spending, 2010 – 2017f
Figure of Urbanlization rate, 2010 - 2015
1.2 Banking Sector Situation
Figure of Credit growth, 2001-2015E
Figure of Average lending rate, 2011-2015
Figure of Banking system’s non-performing loans, 2010 - Sep 2015
Figure of NPL ratios by types of financial institutions
Figure of Sources to clean up bad debts of listed banks
Figure of Sources to clean up bad debts of unlisted banks
Figure of Bad debt structure in SOCBs, 2010-Sep 2015
Figure of Basel Implementation Progress in selected countries by the end of 2015
Table of Restructuring of Vietnam’s banking system
Figure of Scale of Vietnam’s banking system in comparison to other Asian countries
Figure of Financial performance of Vietnam’s banking system
Figure of Asset structure of the system, 2015
1.3 Non-bank Sector Situation
Figure of Total assets of unqualified banks
Figure of Table of M&A deals between commercial banks and finance companies
1.4 Major Legal Policies
Table of Requirements for licensing
1.5 Foreign interest in Vietnamese market
2. VIETNAM’S CONSUMER FINANCE MARKET
2.1 Market Structure
2.2 Market Size and Growth
Figure of Total credit and consumer credit outstanding, 2010 – Sep 2015
Figure of Consumer credit outstanding, 2012 – Sep 2015
Figure of Consumer finance market penetration of selected countries, 2014
Figure of Consumer lending structure, 2013 – Sep 2015
Figure of NPL ratios by types of financial institutions
Figure of Non-performing consumer loan ratios by types of institutions, Sep 2015
Figure of Consumer credit outstanding structure by types of institutions, 2013 - 2015e
Figure of Consumer credit outstanding of selected finance companies, 2013 – 2015
Figure of Market shares of finance companies, 2015
2.3 Competitive Dynamics
Table of Competition within the industry
Table of Competition within the industry
2.4 Informal Finance Activities
3. CONSUMER FINANCE PRODUCTS
3.1 Overview
Table of Joint-stock Commercial Banks
Table of State-owned Commercial Banks
Table of Finance Companies
3.2 Detailed Product Survey
Figure of Interest rate in banks by category, Q1/2016
Figure of Interest rate in finance companies, Q1/2016
Figure of Number of required documents, 2016
Figure of Appraisal time in credit institutions, 1st Quarter 2016
Figure of Number of provinces in which credit institution operates, 2015
3.3 Business Models
4. BUSINESS METHODS
4.1 Sales Channels and Marketing Campaigns
Table of Network system, 2015
4.2 Payment Methods
Table of Payment Methods
5. KEY PLAYER PROFILE
5.1 Local Banks
Figure of ACB Total Assets and Total Loans, 2008-2015
Figure of ACB Loans Portfolio Structure, 2015
Figure of EIB Total Assets and Total Loans, 2008-2015
Figure of Eximbank Loan Portfolio Structure, 2015
Figure of HDBank Total Assets and Total Loans, 2008-2015
Figure of HDBank Loans Portfolio Structure, 2015
Figure of Techcombank Total Assets and Total Loans, 2008-2015
Figure of Techcombank Loans Portfolio Structure , 2015
Figure of VIB Total Assets and Total Loans, 2008-2015
Figure of VIB Loans Portfolio Structure, 2015
5.2 Foreign Banks
Table of ANZ retail partners up to 5/2016
Table of HSBC retailer partners up to 5/2016
5.3 Finance Companies
Figure of ROA, ROE of Home Credit, 2012 – 2014
Figure of ROA, ROE of FE Credit, 2013 – 2015
Figure of ROA, ROE of Prudential Finance, 2012 – 2015
Figure of ROA, ROE of HD Saison, 2012 – 2015
Figure of ROA, ROE of Toyota Fianance, 2012 - 2015
5.4 Others
Figure of ACS Trading Vietnam Company Information
Table of Mobivi outstanding products
6. MARKET POTENTIALS AND CHALLENGES
6.1 Key Growth Drivers
Figure of Population Pyramid, 2015
Figure of Leading retailers in Vietnam
6.2 Development Trends
6.3 Challenges
Executive Summary
1. BUSINESS ENVIRONMENT
1.1 Macroeconomic Situation
Figure of GDP growth and CPI, 2010 – 2015
Figure of Foreign investment, 2010 – 2015
Figure of Exchange rates VND/USD, 2010 – 2015
Figure of FX Reserves, 2010 – 2014
Figure of Retail sales, 2010 – 2015
Figure of Disposable income and consumer spending, 2010 – 2017f
Figure of Urbanlization rate, 2010 - 2015
1.2 Banking Sector Situation
Figure of Credit growth, 2001-2015E
Figure of Average lending rate, 2011-2015
Figure of Banking system’s non-performing loans, 2010 - Sep 2015
Figure of NPL ratios by types of financial institutions
Figure of Sources to clean up bad debts of listed banks
Figure of Sources to clean up bad debts of unlisted banks
Figure of Bad debt structure in SOCBs, 2010-Sep 2015
Figure of Basel Implementation Progress in selected countries by the end of 2015
Table of Restructuring of Vietnam’s banking system
Figure of Scale of Vietnam’s banking system in comparison to other Asian countries
Figure of Financial performance of Vietnam’s banking system
Figure of Asset structure of the system, 2015
1.3 Non-bank Sector Situation
Figure of Total assets of unqualified banks
Figure of Table of M&A deals between commercial banks and finance companies
1.4 Major Legal Policies
Table of Requirements for licensing
1.5 Foreign interest in Vietnamese market
2. VIETNAM’S CONSUMER FINANCE MARKET
2.1 Market Structure
2.2 Market Size and Growth
Figure of Total credit and consumer credit outstanding, 2010 – Sep 2015
Figure of Consumer credit outstanding, 2012 – Sep 2015
Figure of Consumer finance market penetration of selected countries, 2014
Figure of Consumer lending structure, 2013 – Sep 2015
Figure of NPL ratios by types of financial institutions
Figure of Non-performing consumer loan ratios by types of institutions, Sep 2015
Figure of Consumer credit outstanding structure by types of institutions, 2013 - 2015e
Figure of Consumer credit outstanding of selected finance companies, 2013 – 2015
Figure of Market shares of finance companies, 2015
2.3 Competitive Dynamics
Table of Competition within the industry
Table of Competition within the industry
2.4 Informal Finance Activities
3. CONSUMER FINANCE PRODUCTS
3.1 Overview
Table of Joint-stock Commercial Banks
Table of State-owned Commercial Banks
Table of Finance Companies
3.2 Detailed Product Survey
Figure of Interest rate in banks by category, Q1/2016
Figure of Interest rate in finance companies, Q1/2016
Figure of Number of required documents, 2016
Figure of Appraisal time in credit institutions, 1st Quarter 2016
Figure of Number of provinces in which credit institution operates, 2015
3.3 Business Models
4. BUSINESS METHODS
4.1 Sales Channels and Marketing Campaigns
Table of Network system, 2015
4.2 Payment Methods
Table of Payment Methods
5. KEY PLAYER PROFILE
5.1 Local Banks
Figure of ACB Total Assets and Total Loans, 2008-2015
Figure of ACB Loans Portfolio Structure, 2015
Figure of EIB Total Assets and Total Loans, 2008-2015
Figure of Eximbank Loan Portfolio Structure, 2015
Figure of HDBank Total Assets and Total Loans, 2008-2015
Figure of HDBank Loans Portfolio Structure, 2015
Figure of Techcombank Total Assets and Total Loans, 2008-2015
Figure of Techcombank Loans Portfolio Structure , 2015
Figure of VIB Total Assets and Total Loans, 2008-2015
Figure of VIB Loans Portfolio Structure, 2015
5.2 Foreign Banks
Table of ANZ retail partners up to 5/2016
Table of HSBC retailer partners up to 5/2016
5.3 Finance Companies
Figure of ROA, ROE of Home Credit, 2012 – 2014
Figure of ROA, ROE of FE Credit, 2013 – 2015
Figure of ROA, ROE of Prudential Finance, 2012 – 2015
Figure of ROA, ROE of HD Saison, 2012 – 2015
Figure of ROA, ROE of Toyota Fianance, 2012 - 2015
5.4 Others
Figure of ACS Trading Vietnam Company Information
Table of Mobivi outstanding products
6. MARKET POTENTIALS AND CHALLENGES
6.1 Key Growth Drivers
Figure of Population Pyramid, 2015
Figure of Leading retailers in Vietnam
6.2 Development Trends
6.3 Challenges
