Global Integration Business Consultants project - gibc

Executive
Summary
BANKING SECTOR IN U.S. AND VIETNAM
� Bank regulation in the US is evolving
af ter the financial crisis
� Greater capital reserve requirements
� Vietnam banking sector
� Large dong devaluation has
exacerbated banks‟ currency risk
since debt is denominated in
dollars, but cash flows predominantly
in dong
� There is worsening asset quality and
high expected growth in loan outlays
� Banks have insufficient Tier 1 capital
to deal with aggressive lending
Real Estate
Overview
U.S.
Market
China
Market
2008 2009
Offices Min Max Min Max % chg y-o-y
Hanoi 21.43 57.14 15 40 -30
Da Nang 11 24 10 19 -30
Ho Chi Minh City 20 90 15 70 -55
Retail
Hanoi 22.22 62.5 20 50 -30
Da Nang 27.75 50 25 40 -30
Ho Chi Minh City 67 170 50 120 -55
Industrial
Hanoi 4.44 8.75 4 7 -30
Da Nang 5.6 12.5 5 10 -30
Ho Chi Minh City 6.5 11 5 8 -55
Rentals in m 2 /month for 2008 and 2009, (US$)
Source: BMI
If we assume that average building time for a property is 3-5 years, continuing investment in the
Vietnamese commercial sector despite weak indicators (shown above) makes the probability of
recovery in vacancy rates and rental rates weak in the next few years.
Vietnam
Market