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Vietnam has acInitial success in macroeconomic stabilisationhieved a degree of macroeconomic stabilisation,but ANZ warns the shift to a banking system viable over the long term will still take time and continue to impact growth prospects.

Addressing a seminar on economic updates and banking restructure in Hanoi on November 13, ANZ specialist Aninda Mitra, head of the bank’s Southeast Asian Economics division—acknowledged Vietnam’s economy has stabilised but activity remains weak, and slowing credit growth is resulting in significant drag.

He highlighted the country’s financial leverage revealing an up-and-down trend in the credit/GDP ratio. Lower inflation and trade imbalances are easing pressure on the local currency (VND) but healthcare cost increases are strongly affecting inflation, he said.

Vietnam’s exports are undergoing structural change processes, with foreign investment driving a shift towards more technologically advanced areas.

Mitra suggested speeding up the restructuring of the domestic banking system, saying that managing sovereign finances effectively is going to be critical.

According to him, Vietnam has undergone macroeconomic stabilisation but banking de-leveraging remains on the horizon. A viable strategy for reforming State-owned enterprises (SOEs) and banking is needed to limit negative risks to long-term GDP growth, he noted.

The November 13 seminar was organised by ANZ, which has confirmed its No.1 position in Vietnam’s fixed income market by winning all categories in the 2012 AsianMoney fixed income poll. The ANZ claimed best bank for credit services, best for credit research and market coverage, best for credit sales, best for interest rate research, best for interest rate products and sales, and best for interest rate derivatives.

ANZ Vietnam CEO Tareq Muhmood said the awards prove ANZ’s continued market leadership in Vietnam’s capital markets. Given the turbulence in both the global economy and in Vietnam’s business environment, winning these awards reflects ANZ’s efforts and its commitment to providing the best services to customers.

ANZ was among the first international banks to begin operating in Vietnam, establishing its first office in 1993. The bank currently has 10 branches and transaction points across Vietnam offering a full range of services. In June 2012, ANZ was voted “the best international trade bank in Vietnam” by Trade Finance Magazine.

Tran Ngoc/ VOV online

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