Services
The progress of public bond issuance by banks in 2024
According to FiinRatings, the bond market continues to recognize the important role of commercial banks in both supply and demand. The acceleration of credit growth since June signals an improvement in capital absorption. In FiinRatings’ report on the corporate bond market in October 2024, the company’s experts assessed that the corporate bond market is recovering rapidly, mainly in the group of bank bonds. This is a notable trend, especially in the context of the State Bank strengthening risk management regulations to ensure the safety of the banking system as it is today.
In the third quarter of 2024 alone, according to consolidated data from VnDirect, there were 157 corporate bond issuances with a total value of VND 160,140 billion. Of this, banks alone issued a total of VND 119,307 billion, accounting for 81% of the total issuance volume in the market. The increase in the proportion of bank issuances in the quarter aims to increase the ratio of medium and long-term capital mobilization, thereby helping to ensure the maximum ratio of short-term capital mobilization for medium and long-term lending in accordance with the regulations of the State Bank of Vietnam.
KienlongBank’s plan and strategy for sustainable development
With the approval of the State Securities Commission, recently, KienlongBank officially announced the plan to issue bonds to the public. During the offering period, expected to take place from the fourth quarter of 2024 to the second quarter of 2025, KienlongBank will bring to the market 25 million bonds with a par value of VND 100,000 each and a term of 07 years. This type of bond is non-convertible, non-warrant, and unsecured.
Bank bonds, especially publicly issued bonds, are a highly standardized product, specifically and strictly regulated by the Securities Law, and require the approval of the State Securities Commission and listing on the Stock Exchange. In addition to the right to receive periodic interest payments at the announced interest rate, bondholders can also flexibly transfer their bonds through the exchange to new bondholders without having to hold them until maturity.
With a steadfast commitment to ensuring safe lending practices and proactively monitoring fiscal and macroeconomic policies to address challenges and support business production and operations, as well as promote reasonable economic growth, KienlongBank will utilize the capital raised from these bond issuances to supplement its Tier 2 capital, improve its capital adequacy ratio, and focus on priority areas such as digital technology, infrastructure upgrades, and financing sustainable economic development projects to meet the borrowing needs of customers in the period 2024 – 2025. The bank focuses on three key areas: Production and business; Agriculture, rural areas, and consumption; and Trade. This is not only a strategic move for the bank but also contributes to the economic development of localities across the country.
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In terms of business performance, as of the end of the first nine months of 2024, KienlongBank’s consolidated total assets and capital mobilization reached VND 91,827 billion and VND 82,533 billion, respectively, an increase of VND 9,294 billion and VND 11,114 billion compared to the same period last year. In the first nine months of the year, the bank recorded positive growth momentum with pre-tax profit of over VND 760 billion, up 19% over the same period and achieving 95% of the annual profit target.
Promoting Digital Transformation, Aiming for Sustainable Growth
With expectations for the recovery of the Vietnamese economy in the coming years, KienlongBank considers 2024 as a year of acceleration towards becoming a modern and comprehensive Digital Bank in 2025. The bank also aims for sustainable development and selective growth, leading the way to becoming a leading bank in the retail segment, supporting the needs of consumers and small and medium-sized enterprises (SMEs). The recently launched MyShop – Paybox solution has immediately attracted over 100,000 business owners nationwide to use it; the KienlongBank Pay payment solution helps businesses and organizations save time and resources through a modern collection and payment system.
In the future, the Digital Bank model will become an important model for selling and providing services at KienlongBank. In addition to providing a solution to a difficult problem, KienlongBank also expects to create a new standard for a comprehensive Digital Bank model, thereby creating a unique position for banking services in the eyes of customers.
Which Banks Have Recently Been Granted Credit Limit Relaxation by the State Bank of Vietnam?
The State Bank has not disclosed the list of institutions that have been granted a relaxation in the foreign ownership limit. However, several banks had previously expressed their desire for an increase in this limit, hoping to attract more foreign investment.
The Central Bank Eases Credit Limits for Commercial Banks
The recent adjustment has been made in a context of well-controlled inflation, falling below the target set by the National Assembly and the Government. This move is in line with the directives of the Government and the Prime Minister to manage the monetary policy proactively, effectively, and promptly to meet the capital needs of the economy and support production and business development.
Positive Signals from the Vietnamese Banking Sector in Q3 2024
In a tumultuous economic climate, the Vietnamese banking sector in Q3 2024 demonstrated resilience and growth, with positive signals across the board. The latest financial reports indicate significant improvements in the financial performance of commercial banks, especially with the impending expiration of Circular 06. The CAMELS evaluation model paints a comprehensive picture of the current health and stability of the country’s banking system.
“Interest Rates: Sustaining Stability to Support Economic Growth”
The macroeconomic stability and consistent results, coupled with the growth in deposits and credit expansion, attest to the effectiveness of the State Bank’s monetary and credit policy framework and its implementation. This solid performance is a testament to the State Bank’s successful navigation of the economic landscape, fostering an environment conducive to business growth and financial stability.
A Positive Signal from the Corporate Bond Market’s Manufacturing Sector in the First Ten Months
Although corporate bond issuance value plummeted in October, a positive sign emerged with a relatively diverse sectoral issuance structure. Notably, significant value increases were observed in the manufacturing, trading, and services sectors.
