Bank loan-deposit ratios improve significantly

Illustrative image (Source: VNA)

Hanoi (VNA) – The loan-to-deposit ratio (LDR) of eight State-owned commercial banks has improved significantly in recent months, making the industry more optimistic about keeping it at a maximum of 90 percent.

According to the latest statistics from the State Bank of Vietnam (SBV), the LDR of these banks at the end of June had dropped to 93.93 percent, the lowest level over the past 10 months.

Expert said the fall was significant as the LDR had remained high, at 99.11 percent, earlier this year.

For many years, the LDR of the banks has remained high, even reaching 110.01 percent in December 2011, causing high risk for these banks.

While restructuring the banking industry in 2011-15, the SBV targeted reducing the LDR of State-owned commercial banks to a maximum of 90 percent. However, it failed to meet this target.

According to experts, the improvement of the LDR in the first half of this year was attributable to good liquidity and a good balance between deposits and credit in the affected banks.

BIDV, for example, reported that its deposits grew 13 percent in the first half of the year, while credit rose by only 8.3 percent. The deposit and credit ratios at Vietinbank were 9.6 percent and 7.7 percent, respectively.

At Vietcombank, the capital mobilisation ratio rose 6.72 percent in H1, while the credit increased 10.76 percent. However, the gap had little effect on the bank's capital source balance as its LDR was often under 80 percent in recent years. Vietcombank's total mobilised capital by the end of June was 535.203 trillion VND (23.89 billion USD), while its outstanding loans were only 437.58 trillion VND.

Vietnam has seven State-owned commercial banks: BIDV, VietinBank, Vietcombank and Agribank, as well as Construction Bank, GPBank and OceanBank.-VNA