The credit growth quota system, which puts a cap on the credit expansion of each bank, has been maintained by the SBV since 2011, when Vietnam’s economy was experiencing hyperinflation stemming from excessive money supply.
Credit for the individual customer segment last year slowed, while GDP last year recorded a strong recovery and household income growth remained low.
VNDirect estimated that the total value of privately placed corporate bonds maturing in 2025 will reach about 203 trillion VND (8 billion USD), reflecting an 8.5% increase from the previous year.
The following is a brief review of the day’s events as reported by the Vietnam News Agency.
Credit growth across the banking sector reached 15.08% as of the end of 2024, exceeding the year’s target of 15%, according to Standing Deputy Governor of the State Bank of Vietnam (SBV) Dao Minh Tu.
Credit growth across Vietnam's banking system is projected to reach about 16% in 2025, according to the State Bank of Vietnam (SBV).
Commercial banks' pre-tax profits in 2025 are forecast to grow by 14.9% year-on-year, while bad debt has peaked and is expected to decrease next year.
The banking system's credit growth had risen by 11.12% as of November 22 compared to the end of 2023, hence the 15% growth target for the whole year is reachable, according to the State Bank of Vietnam (SBV).
The banking system's credit growth had risen by 11.12% as of November 22 compared to the end of 2023, hence the 15% growth target for the whole year is reachable, according to the State Bank of Vietnam (SBV).
Experts believe that increasing credit growth limits (credit room) not only allows businesses greater access to capital but also helps stabilize the monetary market.
There is a concern about risks that can arise as real estate credit has increased sharply in recent years, particularly by the end of September, higher than the general credit growth of the entire economy.
Deputy Governor of the State Bank of Vietnam (SBV) Pham Quang Dung has recently said that the central bank is studying a plan to gradually abolish the credit growth quota policy following the National Assembly and the Government’s directions.
In a move to restructure the credit institution system and tackle bad debts, the State Bank of Vietnam (SBV) has announced the mandatory transfer of two major banks.
While private joint stock commercial banks have increased capital significantly so far this year, the capital for State-owned commercial banks has remained stagnant.
Asset risks and profitability of Vietnamese banks remained broadly stable, but small banks faced more loan delinquencies and liquidity issues in the first half of 2024, analysts said.
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).
Many banks, which used to focus on lending to individual (retail) customers, have had to shift to expanding corporate lending to achieve credit growth in the first half of 2024.
Leading investment fund VinaCapital remains confident in the Vietnamese stock market in the last months of this year despite foreign investors’ heavy net selling.
Flourishing production and business activities in various sectors and a warming real estate market are the driving forces that increased credit growth, thereby contributing to the growth of the country’s gross domestic product (GDP) in the first half of 2024.
Banks lent more than 480 trillion VND (18.88 billion USD) to economic entities in June, demonstrating the sector’s efforts in concretising the Government’s credit goal of 5-6% to the end of Q2.