Key takeaways from the Live Webinar “Decoding the New Era: Risks and Opportunities in Vietnam's Banking & Consumer Finance Sector”

On December 12th, 2024, FiinGroup successfully organized the webinar “Decoding the New Era: Risks and Opportunities in Vietnam's Banking & Consumer Finance Sector” with more than 200 attendees. Participants included representatives from major local and foreign corporates, financial institutions, and consulting firms.  

The webinar featured key insights from four experts from FiinGroup, including Mr. Nguyen Quang Thuan (Chairman), Mr. Hieu Nguyen (CEO), Mrs. Tran Kieu Oanh (Head of Banking & Financial Sectors, Market Research & Consulting), and Ms. Chi Nguyen (Senior Market Analyst). 

The session provided a comprehensive exploration of Vietnam’s Banking & Consumer finance sector in terms of Banking sector growth momentum, transformation trends: The dual transformation of digitalization and green finance in reshaping the sector, investment drivers of Vietnam’s consumer finance market and regulatory changes influencing M&A, capital raising, and sector development. 

Below are the key takeaways from the Webinar: 

1. Vietnam Banking at a Crossroads: Strengthen Risk Buffers or Pursue Growth? 
Credit growth has rebounded strongly, driven largely by real estate, yet rising developer stress heightens credit risks and the risk of non-performing loans (NPLs), demanding more selective and prudent lending. While reviving SME and retail credit is essential for balanced, sustainable growth, thinning capital buffers and escalating NPLs pose immediate challenges. To navigate this, banks must balance credit-centric strategies with investments in digitalization and sustainable finance, ensuring resilience as they race to fund future growth amidst an evolving economic landscape. 

2. Dual Transformation: The Role of Digitalization and Green Finance in Banking 
Vietnam’s banking sector is embracing dual transformation, with digital and green initiatives shaping the path to sustainable growth. Commercial banks are transitioning from traditional models to advanced digital banking solutions, enhancing customer experience, accelerating processes, and improving efficiency. Simultaneously, the green financing market presents a compelling growth story with significant untapped potential, positioning banks to drive sustainable development. Together, these twin engines of digital innovation and green finance are redefining the future of banking, offering a blueprint for resilience and long-term competitiveness. 

3. Key Challenges and Emerging Opportunities 
Vietnam’s banking sector faces key challenges and emerging opportunities shaped by new regulations and market dynamics. The Law on Credit Institutions 2024 aims to prevent systemic risks by tackling cross-holding issues, enhancing early intervention for weak institutions, and shifting away from high-margin bancassurance to focus on credit earnings. Meanwhile, the Draft Circular on mergers and consolidations provides a framework for reorganizing banks under special control, fostering stability. To bolster resilience, banks are issuing bonds to strengthen Tier 2 capital buffers, but slow credit growth remains a challenge for sustaining net interest income. On the opportunity front, foreign investors continue to show confidence in Vietnamese banks, offering premiums to acquire stakes, signaling potential for growth and strategic partnerships. 

4. Vietnam’s Consumer Finance Market: From Recovery to Growth 
Vietnam’s consumer finance market is poised for a new growth cycle following the economic challenges of 2023. Despite low consumer lending penetration compared to other Asia-Pacific countries, ample growth potential remains, supported by GDP recovery and improvements in labor-intensive sectors. The market has evolved from a concentrated to a dynamic and diversified landscape, with Gen Z driving demand through digital solutions and shifting spending behaviors. While rising living costs and accumulated debt have affected repayment behaviors, FinCos are enhancing digital strategies, optimizing e-KYC and onboarding processes. This transformation, coupled with rising capital demand, presents foreign investors with opportunities to enter a market on track for sustainable growth, better profits, and innovative partnerships. 

On behalf of FiinGroup, we would like to extends the deepest gratitude to all participants for their engagement and insightful questions, which enriched the conversation and inspired deeper dialogues on the future of the sector.  

Kindly refer to the detailed presentation handout HERE. 

Revisit the full webinar HERE. 

For any inquiries on the topic, please contact us at research.support@fiingroup.vn. 

About FiinGroup 

FiinGroup is Vietnam’s leading provider of financial data analytics platforms, business information, market research and consulting, credit ratings, and other data-driven analytics services via Platform as a Service (PaaS), annual package, and on-call services. 

FiinGroup has successfully supported various domestic and foreign investors to successfully navigate the financial services landscape in Vietnam via independent market research reports, commercial due diligence in M&A transactions, M&A transaction advisory and other services. 

We are committed to continuing to support creditors and investors by providing information, research, and solutions to foster the development of the banking and consumer finance sectors in Vietnam. 

For more information about FiinGroup’s support and other investor services and how we can support, please call +84 (24) 3562 6962 or email to research.support@fiingroup.vn.