Banks Miss Out on Vietnamese Stock Rally Amid Credit Crunch Risk
- Nation’s lenders down 6.7% this year as VN Index rallies 19%
- Undercapitalization key issue in system: RongViet Securities
Traffic moves along a road in Hanoi.
Photographer: Justin Mott/Bloomberg News Service/BloombergThis article is for subscribers only.
Vietnam’s banks are missing out on the rally that’s propelled the benchmark share index to an eight-year high as a lack of capital and a lingering bad debt problem keep investors on the sidelines.
A gauge of six lenders listed in Ho Chi Minh City dropped 6.7 percent this year through Wednesday as the VN Index jumped 19 percent, with Bank for Investment and Development of Vietnam and Saigon Thuong Tin Commercial JSB down at least 16 percent. The economy is overly dependent on loan growth and the government lacks funds to bolster banks’ finances, according to Credit Suisse Group AG, which has flagged the risk of a Vietnam credit crunch.