...Fitch Ratings expects the profitability of leading Vietnam banks to be sustained in 2H24, as higher credit costs are offset by steady margins and larger trading gains. Loan impairment levels generally inched up in 1Q24, but we believe this is largely seasonal and we expect asset quality and loan demand to improve over the next few quarters amid a conducive economic environment. Real estate developers have tapped the domestic bond market in only limited volumes but banks ¡ especially private-sector ones ¡ have been eager to plug any refinancing gaps. Commercial real estate and construction loans have consequently risen to 19% of private-sector banks' total lending by end-2023, from 15% at end-2022. The strong backing from banks and the authorities should continue to temper crystallisation of asset quality risks and support the recovery in the real estate sector over the next 12 months. Over the medium term, banks' large appetite for risk and thin capitalisation are likely to remain key credit...
