Lenders hopeful of local economic outlook

Lenders are optimistic about banking and economic prospects, the latest quarterly survey by the central bank has revealed, announced the State Bank of Vietnam recently.

The central bank cited its poll of local credit institutions and branches of foreign banks that 71.6 percent of the lenders found the inner conditions were stable and improved this year as compared to last year.

The progress was seen the most in their customer services, risk management ability and credit policies.

About 34 percent said the business environment was more positive, while nearly 60 percent said the environment was relatively stable.

National interest and exchange rate policies, supervision of banking operations by authorities, and the demand for products and services of banks were relatively better off.

Most of the credit institutions expected demand for loans from customers to rally strongly this year following a drop in interest rates.

Nearly 78 percent of the lenders said their business situation was better, with some 46 percent expecting significant advancement. About 14 percent affirmed business stability.

They were hoping for an average profit growth rate of 9.73 percent for the banking system this year, a rise from the 8.89 percent expectation polled in mid-2015.

Growth of net incomes, which is likely to reach 16 percent to 20 percent this year, drove profitability.

Eighty-nine percent of the credit institutions believed that their bad debt ratios would fall to three percent or lower this year, meeting the national goal for non-performing loan control.

The expected bad debt ratios will average 2.39 percent for the whole credit institution system by end-2015.

Related to liquidity, ninety percent of the lenders said they are seeing good conditions for both the dong and dollar, and nine percent said their situation is stable. Only one percent said their liquidity is not up to expectations.

Overall this year, credit institutions expected deposit growth to average 15.56 percent, and credit growth to reach 17.6 percent.

"These expectations show that the credit institutions are quite optimistic about economic recovery and the ability to absorb loans of enterprises, as well as their outlook for production and business in 2015 and 2016," the central bank said in a report.-VNA