Pre-tax profits of listed banks are forecast to rise by 45.2 per cent in 2018 (File Photo)Hanoi (VNS/VNA) - The State Bank of Vietnam (SBV)will likely continue its tightened monetary policy in the remaining months ofthe year after its decision to strictly controllending to high risk sectors in the third quarter didn’t adversely affect thecountry’s economic growth, according to experts.
In contrast to some concerns that SBV’sregulations on requiring credit institutions to limit loans to high risksectors such as real estate, securities and consumption in the third quarter of2018 could slow down the country’s economic growth, GDP in the period stillgrew well, helping the indicator in the first three quarters expand 6.98 percent,the highest growth since 2011.
With the high growth, the country’s GDP willneed to increase by only 6.1 percent in the last quarter to meet the NationalAssembly’s 6.7 percent GDP growth target set for 2018. Economists forecast thetarget is easily achievable as the annual growth rate of the country’s GDP inthe fourth quarter averaged 6.87 percent over the past five years.
According to the Ho Chi Minh City Securities Corporation(HSC), this result will help reinforce the SBV’s policy of tightening creditgrowth in Q3 and SBV will likely continue the policy in the remaining months ofthe year. In fact, although the official growth target is set at 17 percent in2018, the credit growth limit assigned to commercial banks was only 14 percent.
“SBV wants to control inflation to keep it below 4 percentwhile also ensuring the exchange rate is stable,” HSC analysts said, adding themain tool to achieve the targets is to actively restrict credit growth and SBVwill be confident to continue its policy at least until the end of the year asthe tightened policy didn’t seem to have a negative impact on Q3 GDP growth.
Though inflation has eased in recent months and is currentlybelow 4 percent, the SBV will remain cautious as inflation normally acceleratesin the last months of a year due to seasonal factors, the analysts added.
The HSC analysts have also maintained its pre-tax profitgrowth forecast of listed banks at 45.2 percent in 2018 though projecting thecredit crunch will slightly affect the profitability of some banks.
“We are not worried about this as 2018 will be a specialyear for growth of the banking industry,” the analysts emphasised.
Net interest margin (NIM) and non-interest income of banksare increasing while their provision costs are increasing slowly, theyexplained, adding banks also have significant irregular income from sales ofcollateral assets and investments, and recovery of bad debts. The creditslowdown therefore won’t affect the profit of banks too much.
As for 2019, HSC forecasts pre-tax profits of listed bankswill rise by 19.8 percent against this year despite the continually tightenedcredit.-VNS/VNA
In contrast to some concerns that SBV’sregulations on requiring credit institutions to limit loans to high risksectors such as real estate, securities and consumption in the third quarter of2018 could slow down the country’s economic growth, GDP in the period stillgrew well, helping the indicator in the first three quarters expand 6.98 percent,the highest growth since 2011.
With the high growth, the country’s GDP willneed to increase by only 6.1 percent in the last quarter to meet the NationalAssembly’s 6.7 percent GDP growth target set for 2018. Economists forecast thetarget is easily achievable as the annual growth rate of the country’s GDP inthe fourth quarter averaged 6.87 percent over the past five years.
According to the Ho Chi Minh City Securities Corporation(HSC), this result will help reinforce the SBV’s policy of tightening creditgrowth in Q3 and SBV will likely continue the policy in the remaining months ofthe year. In fact, although the official growth target is set at 17 percent in2018, the credit growth limit assigned to commercial banks was only 14 percent.
“SBV wants to control inflation to keep it below 4 percentwhile also ensuring the exchange rate is stable,” HSC analysts said, adding themain tool to achieve the targets is to actively restrict credit growth and SBVwill be confident to continue its policy at least until the end of the year asthe tightened policy didn’t seem to have a negative impact on Q3 GDP growth.
Though inflation has eased in recent months and is currentlybelow 4 percent, the SBV will remain cautious as inflation normally acceleratesin the last months of a year due to seasonal factors, the analysts added.
The HSC analysts have also maintained its pre-tax profitgrowth forecast of listed banks at 45.2 percent in 2018 though projecting thecredit crunch will slightly affect the profitability of some banks.
“We are not worried about this as 2018 will be a specialyear for growth of the banking industry,” the analysts emphasised.
Net interest margin (NIM) and non-interest income of banksare increasing while their provision costs are increasing slowly, theyexplained, adding banks also have significant irregular income from sales ofcollateral assets and investments, and recovery of bad debts. The creditslowdown therefore won’t affect the profit of banks too much.
As for 2019, HSC forecasts pre-tax profits of listed bankswill rise by 19.8 percent against this year despite the continually tightenedcredit.-VNS/VNA
VNA
