Vietnam is on its way to becoming a heavyweight presence in south-east Asia, with the top ranking for asset growth, while Indonesia retains its crown as the most profitable country in the region.  

Top banks in Asean ranking

Vietnam’s lenders are picking up speed, as they post the second highest growth by country in the Top 100 Association of South-east Asian Nations (Asean) banks ranking. The largest increase in the ranking belongs to Cambodia, which grew by 30.4%, although it has only one lender – Acleda Bank – in the ranking. Cambodia also accounts for only 0.1% of the total assets in the ranking, down from 0.19% the year before. Vietnamese banks – 19 of which made the ranking – grew their assets by the second highest amount, 15.66%, and although they still contribute a relatively small share of the total assets in the ranking, 7.46%, they are up from 6.21% in the previous year. The ranking remains dominated by Malaysia, Singapore and Thailand, which jointly hold nearly three-quarters of the total assets.  

Growth does not necessarily translate into profitability. Indeed, with aggregate return on assets (ROA) of 0.8% and return on capital (ROC) of 12.19%, Vietnam is placed at the tail-end of the Asean ranking for returns. Instead, as has often been the case in the past, the champion in that category is Indonesia, which boasts an ROA and ROC of 2.7% and 25.31%, respectively.

Growing balance sheets

Vietnam’s banks stood out in terms of asset growth, with Vietnam Prosperity Bank coming out on top with a 35.02% increase, followed by local competitors Saigon Commercial Bank and Shinhan Bank Vietnam, which expanded by 34.22% and 33.32%, respectively.

The country’s banks look to be poised to continue this rise. In addition to robust growth and stability, banking penetration remains among the lowest in the region. Only 30.86% of the population aged 15 or over had a bank account in 2014 in a country of 91 million people.

However, as Vietnamese banks expanded their operations they did not raise capital at a corresponding pace. Vietnamese banks registered a meagre 4.54% uptick in Tier 1 capital, the lowest ranking among the countries measured.

Although the local banks are among the least profitable in the ranking, the situation is improving – Vietnam showed a 6% rise in pre-tax profits, which is a bigger increase than for any other country except Singapore, where profits increased by 10.91%.

Another notable growth story comes from the Philippines, which showed the largest asset growth in last year’s ranking. Local balance sheets grew by an impressive 13.59%, the highest after Vietnam and Cambodia, but more slowly than the year before when the country’s banks recorded a 21.26% expansion. East West Banking Corp and Land Bank Philippines contributed the best performances, with their assets growing by 31.7% and 23.21%, respectively. However, as in the case of Vietnam, asset growth did not mean a major increase in the capital base – the aggregate Tier 1 capital growth by Filipino banks amounted to 6.53%.

Lucrative business

Indonesia’s institutions dominate the returns tables, with Bank Rakyat Indonesia boasting the highest ROA and ROC in the ranking, of 3.85% and 37.58%, respectively. Bank of Central Asia followed on its heels, coming second for both ROA and ROC, with 3.75% and 32.22%, respectively. Overall, six of the top 10 banks for the highest ROA and five of the top 10 banks for the highest ROC are Indonesian.   

Indonesian lenders managed these high profits while simultaneously posting the highest Tier 1 capital increase in the ranking. For all Indonesian banks in the ranking, Tier 1 capital grew by 11.93%, more than in any other country bar Cambodia, where the single lender, Acleda Bank, increased its capital base by 22.29%.


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