Vietnam has emerged largely unscathed from the global pandemic. Consumption by an emerging middle class and a trade-driven economy continue to propel economic growth forward, projected at 6.7% in 2021 by the World Bank. Financial service providers—the financial institutions group (FIG) sector—such as commercial banks, consumer finance companies, fintech/payment service companies and insurance providers remain at the forefront of driving economic growth and development.
We anticipate a robust year for M&A activity in the FIG sector. In particular, after a lengthy period of being eased into Basel II compliance, Vietnamese commercial banks must now report capital adequacy and other prudential ratios to the State Bank of Vietnam in accordance with Basel II standards under Circular 22 dated 15 November, 2019, effective 1 January, 2020. The more stringent Basel II compliance will continue to fuel Vietnamese commercial banks' insatiable demand to identify capital sources.
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