After a decade of fast-paced growth and enviable profitability, Vietnamese banks hit a speed bump in late 2022 and will be struggling throughout this year to keep a property sector downturn from undermining the financial system’s overall stability.
So far, Vietnamese regulators, having first over-reacted to dubious practices in the property and bond markets in the fourth quarter of 2022, have taken a more lenient approach in early 2023. This bodes well for a gradual return to bank stability, and thus financial stability, and an avoidance of possible fiscal instability. But much remains to be done.
