Vietnam’s credit growth is slowing and can fall behind the central bank’s target of 14 percent for 2019, causing concerns that it could make it difficult for businesses to access bank loans during the remaining months of the year.
Most domestic credit institutions and foreign banks’ branches in Vietnam expect their business performance in 2019 to be better than last year despite the predicted slowdown in credit growth.
Most domestic credit institutions and foreign banks’ branches in Vietnam expect their business performance in 2019 to be better than last year despite the predicted slowdown in credit growth, according to the State Bank of Vietnam's latest survey released late last week.
Most of credit institutions have expected better business performance for the fourth quarter as well as the whole of 2019, according to a recent survey by the State Bank of Vietnam.
Social policy credit has reached all the communal-level localities nationwide, greatly helping with efforts towards sustainable poverty reduction, heard a teleconference in Hanoi on September 23.
With a positive macroeconomic background at the moment, interest rates will basically stay steady until the end of the year due to excessive liquidity and proper credit growth, according to an official from the State Bank of Vietnam (SBV).
The State Bank of Vietnam (SBV) said it will closely monitor interest rates offered by credit institutions and take measures to strictly handle violations of the law, including cutting credit growth targets.
The Government has asked ministries, sectors and agencies to give advice to the Government and the Prime Minister on measures to deal with overlapping, incoherent and ambiguous legal regulations, mechanisms and policies.
Instead of the modest contribution made previously, the insurance business segment, or bancassurance (banks co-operate with insurers to sell insurance products), has now become the main source of income from service activities for many banks.
Though many banks have posted positive profits in the first half of 2019, their bad debts have continually increased in the wake of high credit growth in risky business segments.
The International Monetary Fund (IMF) on July 16 said Vietnam’s economic growth is projected to slow to 6.5 percent in 2019 from a 10-year high of 7.1 percent in 2018, reflecting weakening external conditions.
The State Bank of Vietnam (SBV) will hold its benchmark refinancing and discount rates at 6.25 percent and 4.25 percent, respectively, in addition to maintaining its 14 percent credit growth target for the remainder of 2019, experts forecast.
The banking sector reported a credit growth of 7.33 percent in the first half of this year compared to the end of 2018, Governor of the State Bank of Vietnam (SBV) Le Minh Hung said.
Moody’s Investors Services has recently affirmed Sai Gon-Hanoi Commercial Joint Stock Bank (SHB) B2 long-term local and foreign currency deposit ratings.
The State Bank of Vietnam (SBV) obtained a large amount of foreign currencies in the first half of 2019, pushing foreign exchange reserves recorded in the period to the highest level to date.
Vietnam is making concerted efforts to improve the quality of information disclosure and transparency of corporate bond issues and listings to develop a healthy bond market and reduce risks for investors.
Though there remains six months, some banks have almost used up the assigned quota for the whole year, and experts said it would be difficult for the banks to get an expansion approval from the State Bank of Vietnam (SBV).
If banks cannot increase charter capital, they’ll have to reduce credit growth, which could harm the provision of capital to serve economic development.
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