Illustrative image (Source: VNA) According to the SBV, as of December 22, credit increased by 12.68 percentcompared to the end of last year. Notably, the credit growth had increasedsignificantly for the past few weeks as until November 25, the rise was only10.1 percent.
This means trillions of Vietnamese dong of bank loans had been poured intoproduction and business in the past few weeks when the country has graduallyreopened after a long time under social distancing.
To meet rising capital demands at year-end, SBV last month extended creditgrowth quotas to 11 banks. TPBank had the highest rising rate of 6 percent, ajump from from 17.4 percent to 23.4 percent, thanks to its strong capitaladequacy ratio (CAR) according to Basel II standards and a diverse investmentportfolio.
Other banks, which were allowed to expand their credit room by roughly 4-5 percentlast month, included Techcombank (from 17.1 percent to 22.1 percent), MSB (from16 percent to 22 percent) and MB (from 15 percent to 21 percent).
Experts from the Vietcombank Securities Company (VCBS) forecast the SBV in 2022will grant long-term credit growth quotas for some banks instead of announcingit every quarter as currently.
Currently, the SBV periodically assesses and modifies the credit growth quotafor each bank based on its CAR, financial strength, risk governance andoperational status.
Besides, banks that do not focus lending on hazardous and vulnerable businessesand offer low lending interest rates will get the SBV priority in havinghigher credit growth quotas.
With the criteria, VCBS experts expected banks such as TCB, TPB, VPB, MBB, ACB,HDB, VIB and MSB will receive long-term credit growth quotas higher than theaverage rate.
Banking expert Nguyen Tri Hieu said the central bank was likely to extendlong-term credit growth quotas for some banks next year thanks to a significantrise of retail credit, which will remain a main growth driver for the bankingsystem in the year.
According to the SBV, the proportion of retail credit has increased from 31 percentin 2015 to 42 percent of total outstanding loans at the end of the thirdquarter of 2021.
Hieu explained the country’s rising proportion of workers with high-incomejobs, especially in foreign direct investment (FDI) firms, would helppromote the demand for consumer loans. This is also a criterion for the SBV toexpand long-term credit growth quotas for some banks.
According to the SBV’s Deputy Governor Dao Minh Tu, the SBV will increase thecredit growth target for 2022 to around 14 percent against 12 percent in 2021.However, the rate might be adjusted flexibly in its operational approach.
The Government has so far also required the whole banking industryto implement effective credit policies to support the development ofproduction and business and the recovery of the economy after the pandemic.
Besides commitments to increase capital for priority industries andsectors, Tu noted the banking system would apply stringent controlover at-risk businesses, particularly in keeping a firm hand over their realestate assets, risky corporate bonds and their stocks.
The central bank will take steps to closely monitor credit flows to the realestate and securities industries, he said, adding that loans used forspeculative reasons, which caused market volatility in the industrieswould be restricted.
However, he noted, the SBV would continue to prioritise and provide favourableconditions for the residential real estate sector to address genuine consumerdemands. Besides, the capital flows for the healthy and stable development ofthe securities market would also be encouraged./.
VNA
