On the morning of February 27, 2025, FiinRatings and S&P Global Ratings jointly hosted the "Vietnam Credit Spotlight 2025: Growth, Credit, and Capital Markets in a New Era" seminar in Hanoi. The event brought together senior executives from leading enterprises, financial institutions, domestic and international economic experts, and representatives from regulatory bodies. The seminar served as a crucial platform to discuss financial strategies aimed at fostering economic growth and ensuring the sustainable development of Vietnam's capital markets.

Mr. Thomas Jacobs (Country Director for Vietnam, Cambodia, and Laos PDR at International Finance Corporation-IFC) delivered the keynote presentation at the seminar. (Photo: FiinRatings)

Challenges to Growth and the Role of Capital Markets

Speaking at the seminar, Mr. Nguyen Quang Thuan, Chairman and CEO of FiinRatings, emphasized that achieving an 8% GDP growth target in 2025 and progressing towards double-digit growth in subsequent years would be a formidable challenge. He pointed out that Vietnam’s economy remains heavily reliant on bank credit, with a credit growth target of 16%. In this context, the capital market must play a more significant role in providing long-term financial resources for the economy.

Although the corporate bond market has shown signs of recovery, particularly in the non-banking sector, significant constraints remain. This underscores the urgent need to expand the investor base and enhance the regulatory framework to create a sustainable foundation for capital market development.

Credit Ratings and Lower Borrowing Costs

One of the key topics discussed was the goal of improving Vietnam’s sovereign credit rating. Currently, the country’s public debt stands at over USD 150 billion. An improved sovereign rating would enable Vietnam to access capital at lower costs, thereby reducing borrowing rates for domestic private enterprises.

Ms. Pham Thi Thanh Tam (Deputy Director of the Department of Finance for Banks and Financial Institutions) spoke at the seminar. (Photo: FiinRatings)

According to S&P Global Ratings’ June 2024 assessment, Vietnam is currently rated BB+ with a stable outlook. An upgrade in credit rating would strengthen investor confidence and attract long-term capital inflows into the economy.

Credit Growth and the Capital Challenge for Banks

Mr. Ivan Tan, Director of Financial Institutions Ratings at S&P Global Ratings, noted that Vietnam's credit growth rate remains stable and is higher than that of regional peers. However, the capital adequacy ratio (CAR) of Vietnamese banks stands at 12.4%, significantly lower than that of Cambodia (22.6%), Thailand (20.5%), and China (15.6%). This indicates that Vietnamese banks need additional capital to sustain strong credit growth.

One proposed solution is to increase foreign investor participation in the banking sector. However, foreign ownership in major banks has already approached the regulatory cap, posing challenges in attracting further international capital.

Corporate Bond Market and New Growth Drivers

FiinRatings forecasts that the outstanding balance of the corporate bond market will grow by 15-20% in the coming period, driven by refinancing needs and substantial capital demand from capital-intensive industries. However, unlocking the capital market’s potential requires broadening the investor base, establishing a risk-based capital allocation framework, and strengthening credit guarantee mechanisms.

Mr. Nguyen Quang Thuan (Chairman and CEO of FiinRatings) spoke at the seminar. (Photo: FiinRatings)

Mr. Nguyen Quang Thuan stressed that if the capital market is not reformed promptly, achieving an 8% GDP growth target in 2025 and double-digit growth in subsequent years will be highly challenging. “Can the banking credit market continue to shoulder this burden?” he posed.

Key Takeaways and Future Outlook

The "Vietnam Credit Spotlight 2025" seminar provided in-depth insights into the current state and future outlook of Vietnam's credit and capital markets. As the economy moves towards sustainable growth, diversifying funding channels and enhancing the financial market’s capacity are critical factors. With the collaboration between FiinRatings and S&P Global Ratings, practical solutions will continue to be developed and implemented to support businesses and ensure the stable growth of Vietnam’s financial markets.

For further details:

• Analyst presentations at the event (Vietnamese version): HERE 

• Analyst presentations at the event (English version): HERE

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About FiinRatings 
FiinRatings, a member of FiinGroup and technical partner of S&P Global Ratings, is a licensed credit rating agency under Vietnam’s Ministry of Finance. Our services include credit ratings, green bond verification, and independent evaluations (Second Party Opinion - SPO), catering to issuers, lenders, and investors across diverse sectors in Vietnam. 

FiinRatings’ SPO services provide independent evaluations of financial instruments, policy frameworks, or transactions aligned with principles set by global institutions like the International Capital Market Association (ICMA) and the Climate Bonds Initiative (CBI). Notably, FiinRatings is the first approved verifier for CBI Climate Bond Standards in Vietnam.