...Retail loans have increased as a share of the rated banks' total loans due to rising consumerism and an improving housing market This has helped diversify banks' loan compositions and limit loan concentration risk, but retail loans can be vulnerable to economic volatility The rated banks' loan growth exceeded that of the industry, largely due to rapid retail loan expansion We expect rapid retail loan growth to be sustained in the short term because of strong customer demand and robust economic growth Sustained rapid loan growth could become a source of credit-quality problems, as has been the case in the past Our rated banks, except Vietinbank, have almost fully written-off their bad debts sold to VAMC We expect the decline in the banks' problem loan ratios to continue, supported by a benign operating environment and strong retail loan growth Reserve coverage for problem loans has improved, but the ratios remain low, especially for Military Bank, relative to the banks' large legacy NPLs...
