CREDIT ACTIVITIES OF VIETNAM’S COMMERCIAL BANKS (2020-2024) AND RECOMMENDATIONS

Abstract

This study aims to analyze and evaluate the credit operations of Vietnam’s banking system and credit institutions from 2020 to 2024. By collecting data from specialized agencies and applying comparative statistical and quantitative analysis methods, the research reveals significant fluctuations in credit activities between two distinct periods: “2020–2022” (marked by pandemic outbreaks and socio-economic restrictions) and “2022–2024” (post-COVID-19 recovery). Key findings include: (i) Rapid Credit Expansion: Credit scale grew sharply, with credit explaining 98.8% of GDP variance, highlighting its dominant role in economic growth; (ii) Rising Non-Performing Loans (NPLs): A surge in bad debts emerged as a major challenge; (iii) Overconcentration in Credit: The banking system heavily relies on credit (high credit-to-total-assets ratio). The asset-to-GDP ratio remains excessively large, reflecting “systemic risk concentration” in credit activities across both the economy and banking sector; (iv) Strengths, Limitations & Causes: The study identifies specific positive aspects, constraints, and underlying factors. Based on these results, the authors propose a synchronized set of solutions and policy recommendations for state authorities, banks, and credit institutions to mitigate risks and enhance stability towards sustainable development.