Analyst Pin-board Banking sector – Update on credit market share
- The credit market has seen changes in the last five years. Some of those are expected to be sustained in the future.
- Most of the state-owned banks underperformed sector in the last five years regarding credit expansion. Private banks sustained high credit growth, and diversified into corporate bonds when loan demand weakened. However, this does not reflect a change in risk appetite yet.
- The gap between private banks and state-owned banks will keep narrow, but the pace will slow down due to improved capital. The ranking of private banks regarding credit share is expected to change.
- Based on GDP growth, we project a double-digit credit growth in the upcoming years. For 2021, the forward growth is 13.1% on average. Therefore, we look forward to large private banks outperforming due to strong buffers. Given the uncertainty of the economic recovery, as well as the pandemic development, we maintain our positive view on TCB, VCB, and ACB.
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