Illustrative image (Souce: cafebiz.vn)Hanoi (VNS/VNA) - Maximumcredit growth this year is forecast to be just 18-19 percent, meaning that thebanking system will not use up the increased room of 21 percent.
The Government in August decided to extendthis year’s credit growth target to 21 percent from 18 percent plannedpreviously to support economic growth.
According to Bao Viet Securities Company(BVSC), credit growth will not reach 21 percent for several reasons.
First, it is likely that firms’ ability toabsorb capital is limited and the capital demand of the economy is likely to beonly 15-18 percent per year, which is a moderate level without causing too muchrisk of potential bad debt.
Second, some banks such as VIB, ACB, HDBankand Military Bank want to strengthen their lending. However, in the first twoquarters of the year itself, their lending quota was almost used up.
Third, banks such as Vietcombank, BIDV andVietinbank that have the largest capital scale in the banking system are facingdifficulties in raising capital to meet the State Bank of Vietnam’s (SBV) BaselII regulations. The Capital Adequacy Ratio of banks is also approaching theregulated 9 percent threshold. Therefore, it will be difficult for the banks toexpand lending if they fail to increase capital in the near future.
As a result, BVSC forecasts that creditgrowth for this entire year is likely to reach 18-19 percent, the level equalto 2016.
Previously, SBV Governor Le Minh Hung saidthe central bank is under no pressure to relax the monetary policy to help thecountry achieve the economic growth target of 6.7 percent this year. The centralbank had asked credit institutions to control credit growth and ensure creditquality.
"This year, the quality of loans hasbeen strengthened and tightly controlled in the risky industries, especiallyreal estate. The Government and the SBV are consistent with the opinion thateconomic growth must ensure the goal of macro-economic stability," Hung said.
Reports of the National FinancialSupervisory Commission showed that lending of the banking system hadaccelerated significantly last month. Specifically, credit growth in Novemberrose 2.8 percent against the previous month, pushing the total rise in thisyear’s first 11 months to 15.3 percent.
According to the Government’s financialwatchdog, the ratio of medium- and long-term loans in the 11 months increasedby 12.7 percent against December last year and accounted for 53.8 percent oftotal outstanding loans.
The rising rate of short-term loans was18.6 percent, compared with 15.2 percent in the first 11 months of 2016.
The commission also noted that lending inforeign currency expanded 12.3 percent from the end of 2016, more than doublingthe expansion of 5.8 percent in the same period last year.
Meanwhile, loans in Vietnam dong increased15.6 percent in the 11-month period, lower than the 16.6 percent increase inthe same period last year, and accounted for 91.8 percent of total credit.
The commission highlighted that consumer lendingcontinued at a rapid pace, with growth hitting 59 percent in the 11-month period,driven mainly by home loans. – VNA
The Government in August decided to extendthis year’s credit growth target to 21 percent from 18 percent plannedpreviously to support economic growth.
According to Bao Viet Securities Company(BVSC), credit growth will not reach 21 percent for several reasons.
First, it is likely that firms’ ability toabsorb capital is limited and the capital demand of the economy is likely to beonly 15-18 percent per year, which is a moderate level without causing too muchrisk of potential bad debt.
Second, some banks such as VIB, ACB, HDBankand Military Bank want to strengthen their lending. However, in the first twoquarters of the year itself, their lending quota was almost used up.
Third, banks such as Vietcombank, BIDV andVietinbank that have the largest capital scale in the banking system are facingdifficulties in raising capital to meet the State Bank of Vietnam’s (SBV) BaselII regulations. The Capital Adequacy Ratio of banks is also approaching theregulated 9 percent threshold. Therefore, it will be difficult for the banks toexpand lending if they fail to increase capital in the near future.
As a result, BVSC forecasts that creditgrowth for this entire year is likely to reach 18-19 percent, the level equalto 2016.
Previously, SBV Governor Le Minh Hung saidthe central bank is under no pressure to relax the monetary policy to help thecountry achieve the economic growth target of 6.7 percent this year. The centralbank had asked credit institutions to control credit growth and ensure creditquality.
"This year, the quality of loans hasbeen strengthened and tightly controlled in the risky industries, especiallyreal estate. The Government and the SBV are consistent with the opinion thateconomic growth must ensure the goal of macro-economic stability," Hung said.
Reports of the National FinancialSupervisory Commission showed that lending of the banking system hadaccelerated significantly last month. Specifically, credit growth in Novemberrose 2.8 percent against the previous month, pushing the total rise in thisyear’s first 11 months to 15.3 percent.
According to the Government’s financialwatchdog, the ratio of medium- and long-term loans in the 11 months increasedby 12.7 percent against December last year and accounted for 53.8 percent oftotal outstanding loans.
The rising rate of short-term loans was18.6 percent, compared with 15.2 percent in the first 11 months of 2016.
The commission also noted that lending inforeign currency expanded 12.3 percent from the end of 2016, more than doublingthe expansion of 5.8 percent in the same period last year.
Meanwhile, loans in Vietnam dong increased15.6 percent in the 11-month period, lower than the 16.6 percent increase inthe same period last year, and accounted for 91.8 percent of total credit.
The commission highlighted that consumer lendingcontinued at a rapid pace, with growth hitting 59 percent in the 11-month period,driven mainly by home loans. – VNA
VNA
