A number of banks including BacABank, VPBank, and PG Bank, have all recorded drops in third-quarter profits year-on-year, VietnamBiz and Mekong ASEAN are reporting. There is speculation that this will be common among banks this reporting period, with reduced income from interest payments weighing heavily on balance sheets.
Why it matters: This goes to the broader narrative of banks struggling to lend on the back of reduced demand. Note that interest rates have come down considerably this year, but credit growth has remained low. Whereas there is cash available, firms appear to not be interested in borrowing due to uncertainties in the global economy but also many have already exhausted their collateral and subsequently their borrowing facilities.