Eighty-eight per cent hope the deposit and lending interest rates for the dong will remain stable or decline, while 70 per cent expect these rates to decrease 1.24 per cent and 1.43 per cent, respectively, in this year over last year. — VNA/VNS Photo Tran Viet

HA NOI (Biz Hub) — With a rallying economy and help of policies supported by the Government, credit institutions expect better business results in the third quarter of this year.

These are the findings in a State Bank of Viet Nam's (SBV's) quarterly survey of business trends in the banking sector, carried out between May 20 and June 9, with 94 out of 117 polled institutions responding.

Eighty-eight per cent hope the deposit and lending interest rates for the dong will remain stable or decline, while 70 per cent expect these rates to decrease 1.24 per cent and 1.43 per cent, respectively, in this year over last year.

Ninety per cent expect that deposits and loans will grow 3.6 per cent in Q3 and 14.2 per cent in 2014, for the whole banking system, while over 80 per cent say their bad debt ratios will remain unchanged or fall slightly.

With regards to the business prospects, 71 per cent expect improvement while 5.3 per cent have expressed concerns about recession this year.

Over 60 per cent have assessed that the customer demand for banking products and services is currently "normal", 20 per cent think it is "high", and 15 per cent believe it is "low". They all believe, however, that demand will continue to rise in the rest of the year.

Most of the institutions say they will maintain or lower product and service charges, and even a slight reduction in prices won't affect their general business results.

About 36 per cent plan to recruit more employees while only 2.2 per cent intend to retrench staff in the third quarter. For the whole year, the rates are 59 per cent and 3.3 per cent, respectively.

The credit institutions say the SBV policies related to interest and exchange rates as well as operational security have improved significantly and have had a positive impact on the business situation of banks.

Over 90 per cent note that the liquidity at their institutions has stabilised and improved in Q2 for both domestic and foreign currencies, and this trend is likely to continue in the coming months.

But very little change is forecast in business and finance conditions, while the demand of the economy for banking products and services will rise slowly. — VNS