Banks eye ways to convert deposit boom into lending
Commercial banks are seeking ways to boost lending as bank deposits have increased in the past few months.
Commercial banks are seeking ways to boost lending as bank deposits have increased in the past few months.
By the end of June, Vietnam's credit growth in the first half of this year surged only 3.52 percent compared to last December, the State Bank of Vietnam reported.
Ho Chi Minh City-based commercial banks have launched several preferential credit programmes to boost their lending.
NamA Bank Deputy General Director Tran Ngoc Tam said his bank could not wait for businesses to ask for loans and had to find ways to boost lending by any means possible. The bank employees have to get access to potential borrowers and offer them suitable loan packages, reports Tuoi Tre (Youth) online.
An executive at the Sacombank acknowledged that apart from boosting lending for large-scale businesses, his bank also sought individual borrowers and small and medium-sized businesses. The businesses still wanted to maintain their production despite the difficult economic circumstances.
Sacombank has launched many credit programmes for small and medium-sized enterprises with a 1 billion VND maximum loan package. Loan application procedure will be processed within two days.
By the end of June, the individual loan packages of Sacombank rose 13 percent over the same period last year, he said.
A deputy general director at a commercial bank in HCM City District 1, who asked not to be identified, said his bank staffers have to get business in any way possible. For individuals, the bank has to approach borrowers through State offices, schools or buy information from shopping centres and insurance companies.
He said those who visit shopping centres are often high-income earners, thus making it easier for the bank to offer them services.
According to economist Nguyen Tri Hieu, household businesses and individual borrowers are those who are able to absorb loans in the current economic circumstances.
On the other hand, due to small loans, banks can avoid the risks of bad debts. Commercial banks get high lending interest rates from them as compared to lending interest rates offered to businesses.
He said businesses are still facing difficulty gaining access to cheap bank loans due to their "poor health" on account of bad debts and no assets to mortgage. Also, the banks do not want to face high ratio of bad debt lending.
A survey carried out by Vietnam Business Association found that 27 percent of businesses cannot take bank loans due to incomplete lending application procedures while 8 percent do not want loans. The remaining businesses are not qualified due to their existing bad debts and no assets to mortgage.
Economist Le Xuan Nghia said the most difficult thing now is that banks do not believe in businesses and want to insulate themselves from high risks.
Nghia noted that if this situation prevailed it would make an adverse impact on the country's economic recovery.
Nghia also attributed the low credit growth over the months to the sluggish recovery of bad debts in commercial banks. If no breakthrough was made to handle the bad debt issue soon, the credit growth would remain low, he added.-VNA
By the end of June, Vietnam's credit growth in the first half of this year surged only 3.52 percent compared to last December, the State Bank of Vietnam reported.
Ho Chi Minh City-based commercial banks have launched several preferential credit programmes to boost their lending.
NamA Bank Deputy General Director Tran Ngoc Tam said his bank could not wait for businesses to ask for loans and had to find ways to boost lending by any means possible. The bank employees have to get access to potential borrowers and offer them suitable loan packages, reports Tuoi Tre (Youth) online.
An executive at the Sacombank acknowledged that apart from boosting lending for large-scale businesses, his bank also sought individual borrowers and small and medium-sized businesses. The businesses still wanted to maintain their production despite the difficult economic circumstances.
Sacombank has launched many credit programmes for small and medium-sized enterprises with a 1 billion VND maximum loan package. Loan application procedure will be processed within two days.
By the end of June, the individual loan packages of Sacombank rose 13 percent over the same period last year, he said.
A deputy general director at a commercial bank in HCM City District 1, who asked not to be identified, said his bank staffers have to get business in any way possible. For individuals, the bank has to approach borrowers through State offices, schools or buy information from shopping centres and insurance companies.
He said those who visit shopping centres are often high-income earners, thus making it easier for the bank to offer them services.
According to economist Nguyen Tri Hieu, household businesses and individual borrowers are those who are able to absorb loans in the current economic circumstances.
On the other hand, due to small loans, banks can avoid the risks of bad debts. Commercial banks get high lending interest rates from them as compared to lending interest rates offered to businesses.
He said businesses are still facing difficulty gaining access to cheap bank loans due to their "poor health" on account of bad debts and no assets to mortgage. Also, the banks do not want to face high ratio of bad debt lending.
A survey carried out by Vietnam Business Association found that 27 percent of businesses cannot take bank loans due to incomplete lending application procedures while 8 percent do not want loans. The remaining businesses are not qualified due to their existing bad debts and no assets to mortgage.
Economist Le Xuan Nghia said the most difficult thing now is that banks do not believe in businesses and want to insulate themselves from high risks.
Nghia noted that if this situation prevailed it would make an adverse impact on the country's economic recovery.
Nghia also attributed the low credit growth over the months to the sluggish recovery of bad debts in commercial banks. If no breakthrough was made to handle the bad debt issue soon, the credit growth would remain low, he added.-VNA
You should also see
Localities get ready for fourth FDI boom
As the year 2024 is expected to witness the start of the fourth wave of foreign direct investment (FDI) to Vietnam, localities nationwide are getting ready to absorb foreign capital flows.
See more
Business
Japan's Takashimaya plans to expand investment in Vietnam
Takashimaya, a Japanese operator of upscale department stores, plans to open a shopping centre in Hanoi in 2026 that will be the company's first new location abroad in eight years, Japanese newspaper Nikkei reported.
Business
Noi Bai, Da Nang named in world’s top 100 airports
Hanoi capital’s Noi Bai International Airport and the Da Nang International Airport in the central city of the same name have been listed among the world’s top 100 airports in 2024 by the UK–based aviation consultancy Skytrax.
Business
Vietnam earns 1.43 billion USD from rice exports in Q1
ietnam in the first quarter of 2024 exported 2.18 million tonnes of rice, earning 1.43 billion USD, an increase of 17.6% in volume and 45.5% in value year on year. Meanwhile, the average export rice price also increased by 23.6% to $653.9 per tonne.
Business
HCM City moves towards Net Zero
Ho Chi Minh City is building a project to restructure its industry towards sustainable development in the 2025-2030 period, with a vision to 2050, prioritising the use of high technology and reducing emissions towards net zero emissions by 2050.
Business
Old loans must endure higher interest rates temporarily: central bank
The average lending interest rate for new loans by commercial banks is reported at around 6.4% per year, a decrease of 0.7 percentage point per year compared to the end of last year. However, borrowers with loans issued before the latest rate adjustment still must pay higher rates, according to the State Bank of Vietnam (SBV).
