Illustrative image (Source: VNA)
 
Hanoi (VNA) - Despite expectations of stable interest rate levels this year, credit institutions have made adjustments in their forecast for capital mobilisation and credit growth in the second quarter and the year, according to a State Bank of Vietnam (SBV)’s latest survey.

The survey on business trends of credit institutions conducted from February 25 to March 9 by the SBV’s Statistics and Forecasting Department questioned all credit institutions and branches of foreign banks nationwide. The rate of response was 89.5 percent.

Specifically, the capital mobilisation of the whole system would likely grow at 5.58 percent in the second quarter of the year and 16.23 percent in the whole year, slightly less than the expectation of 16.76 percent made in the December 2016 survey.

Credit growth from April to June this year is anticipated to reach 5.81 percent while that for the whole year would be 17.23 percent, lower than the 2016 real growth rate of 18.25 percent and 2017 target of 18 percent.

Earlier, in the 2016 survey, the credit growth was expected to be even higher, at 20.09 percent. 

According to the survey’s results, the abundance of banking liquidity is forecast to be maintained in the second quarter and the whole year for both, the Vietnam dong and foreign currency, as it was in the first three month of the year. 

Liquidity abundance of the credit institution system is a foundation for stabilising the interest rates of deposits, which helps keep the interest expense stable and thereby maintain the net interest margin.

It is also one of the prerequisites for stabilising the lending interest rates to support production and business expansion of enterprises, contributing to the economic growth target of 6.7 percent this year.

Most of the credit institutions said that their bad debt to outstanding loan ratio in the second quarter of the year would be less than or unchanged from the levels of the first three months of the year.

The survey also reveals that more than 90 percent of correspondents expect they would reap higher after-tax profit in this year than last year.

The optimistic forecast of the institutions was based on their confidence in the Government’s efforts to improve business climate and their own actions to strengthen its internal operations.

Overall, 75.2 percent of credit institutions expect a better business outlook in the second quarter and 83 percent of those surveyed believe in better business results in the whole year.

With regard to average prices of financial products and services, half of the credit institutions answered that they would keep the average price unchanged for the whole year, while 20 percent of them said that they plan a slightly decrease and 30 percent responded with a small rise.-VNA