Hanoi (VNA) – Banks with credit growth of at least 80% of the targets set by the central bank at the beginning of the year are allowed to expand lending based on credit ratings, according to the State Bank of Vietnam (SBV).
The central bank advised commercial banks and other credit institutions to comply with its regulations, saying the goal is to enhance business efficiency, ensure system safety and stabilise the monetary market.
Credit growth must be carefully planned to ensure safe and sustainable development of the market, to minimise bad debts and to protect the system. Available credit should prioritise production industries, growth drivers and economic sectors of strategic importance. High-risk sectors must be monitored closely to ensure stability.
"In the coming months, the SBV will continue watching domestic and international market developments, support market liquidity while creating favourable conditions for commercial banks and other credit institutions to increase credit and implement effective monetary policies," said the SBV.
As of August 26, the outstanding credit rose by 6.63% compared to the end of 2023, while the figures in July and June were 5.66% and 6.1%.
Dr. Nguyen Duc Do, Deputy Director of the Institute of Economics and Finance under the Ministry of Finance, said Vietnam witnessed impressive economic growth in Quarter 2, promoting market confidence, and bolstering credit demand as businesses and individuals sought investment opportunities and expanded production.
Others held that the noticeable credit improvement was spurred by rational interest rates.
Chairman of the Vietnam Bank for Agriculture and Rural Development (Agribank) Pham Duc An said the bank has carried out 14 credit programmes and products, with nine for individual customers and five for corporate customers, adding loans for the forestry-fisheries sector have risen to 8 trillion VND (324.5 million USD).
The bank has lowered interest rates four times this year, with the floor rates decreasing by 0.5-1% a year, he stressed.
Meanwhile, Asia Commercial Joint Stock Bank (ACB) has rolled out measures to remove bottlenecks, and create favourable conditions for individuals and enterprises to access capital. It has controlled input costs to cut the lending interest rates, while promoting connectivity between businesses and associations to foster credit growth, according to ACB General Director Tu Tien Phat.
Amidst pressure from falling exchange rates and the central bank’s trend toward reducing future rates, lending rates will remain low, supporting enterprises while contributing to promoting economic growth, Do said.
A survey from the SBV’s Department of Forecasting and Statistics showed that demand for loans are expected to be higher than those for deposits and payments in Quarter 3.
Economist Dinh Trong Thinh described Vietnam’s robust import-export revenue of 473.33 billion USD as of August 15 as a vivid demonstration for the fact that local firms are striving to bolster trade activities. They have a great demand for loans to fulfill their upcoming orders.
In the meantime, Vietcombank Securities Co., Ltd has forecast the country’s credit growth could reach 12-13% for the whole year, with positive production and export activities, and acceleration of public capital disbursement.
Housing loans, it said, could lead retail credit growth in the coming time on the back of low interest rates, spurring a recovery in the real estate market.
Meanwhile, VPBank Securities Joint Stock Company (VPBankS) held that the credit growth target of 14.83% is within reach, with high expectations for the annual year-end consumption season, and the US Federal Reserve’s reduction of interest rates.
However, VPBankS analysts worried that the credit growth of 14-15% actually represents a huge challenge due to the high credit-to-GDP rate./.
