Low CAR spells doom for state-owned banksState-owned commercial banks are growing concerned over the critically low capital adequacy ratio (CAR) of around 9 per cent, which also hit the minimum required CAR for the Vietnamese banking system. Specifically, recent statistics provided by the National Financial Supervision Commission (NFSC) presented a downward trend in the average CAR of the entire banking system from over 12 per cent in 2016 to around 11 per cent in 2017. Notably, financial statements provided by numerous state-owned finanical institutions (FIs) showed an alarmingly low CAR of 9 per cent. Despite the laudable efforts of maintaining credit growth stability (18-19 per cent), nearly 20 FIs failed to reach the targeted CAR at the beginning of 2017 due to failed attempts of raising charter capital. Nguyen Van Thuy, deputy head of NFSC's General Supervision Department, asserted, “Regardless of the 40 per cent profit growth, there is little to prevent the pressure on state-owned commercial banks.

Source: VietNamNet News December 30, 2017 08:48 UTC