Consumer loans rise nearly 30 percent by end of May

Hanoi (VNA) - Consumer lending by the end of May rose 29.7 percent against the end of 2016, the National Financial Supervisory Commission (NFSC) has said.

Of the total consumer loans, home renovation loans and home purchase loans accounted for 52.8 percent, compared with 49 percent in the end of 2016.

As per the NFSC’s report, credit growth of the entire banking system was positive, reaching 6.8 percent in May, compared to 5.7 percent in the same period in 2016.

In particular, the lending terms have changed towards fewer medium-term and long-term loans. The proportion of short-term loans was estimated at 45.4 percent, against 44.9 percent in late 2016. Meanwhile, the proportion of medium- and long-term loans fell to 54.6 percent, against 55.1 percent.

Lending in Vietnamese dong accounted for nearly 92 percent, while lending in foreign currencies fell slightly to 8.2 percent of the total lending from 8.4 percent in late 2016.

At the end of the first quarter of 2017, the banking sector continued to be the economy’s main source of capital supply, accounting for nearly 60 percent of the total capital supplied via the financial market.

The NFSC reported that as of now, liquidity troubles have declined. The ratio of loan to deposit (LDR) of the entire banking system was 87 percent as of May, slightly lower than earlier. Inter-bank interest rates have also fallen to 4-4.2 percent per year from the previous 5 percent. The State Bank of Vietnam withdrew 28 trillion VND (1.22 billion USD) in May.

According to the NFSC, the positive liquidity status is because of a rapid rise in State Treasury deposits as budget disbursement remains slow. As of late April, State Treasury deposits reached 122 trillion VND, up 28.4 percent against the beginning of the year.-VNA