Banks ask for higher credit quota to prepare for peak lending season

Despite a credit slowdown in the first half of 2020, some private commercial banks have still asked the State Bank of Vietnam (SBV) for a credit growth expansion to prepare for a peak lending season expected at the end of the year.

Banks ask for higher credit quota to prepare for peak lending season hinh anh 1

The credit growth of the entire banking system is estimated at less than 10 percent in 2020 (Photo: VNA)

Despite a credit slowdown in the first half of 2020, some private commercial banks have still asked the State Bank of Vietnam (SBV) for a credit growth expansion to prepare for a peak lending season expected at the end of the year.

According to the SBV’s policy, it assigns an annual credit growth quota for each bank depending on business performance and bad debt ratios to control lending of the entire banking system and ensure money supply and inflation control as targeted by the Government.

The credit growth in the first half of this year is only half of the same period of last year. SBV’s statistics showed banks’ mobilised capital increased by 5.31 percent while loans grew only by 3.45 percent in the period.

However, banks said loans often increase sharply at the end of the year when capital demands of both firms and inpiduals surge significantly to prepare for the country’s holidays and festivals.

According to finance expert Huynh Trung Minh, it is feasible for the SBV to loosen the credit growth limits for banks, but banks must ensure to lend to only effective projects.

SBV has also recently expanded credit growth limits for some banks with healthy business performance to boost the country’s economic growth. Techcombank, VIB, VPBank, TPBank and Sacombank were approved to raise their credit growth limits to 19-23 percent.

Despite the expansion, a report of BIDV Securities Company (BSC) estimated the credit growth of the entire banking system this year would be only 9 percent, compared with the 13 percent rate in 2019.

Banks have been reducing the proportion of lending to inpiduals and small- and medium-sized enterprises (SMEs) while focusing on large-sized businesses with good resistance against the COVID-19 pandemic, BSC noted.

Sharing the same view, Vietcombank Securities Company (VCBS) also said the SBV had loosened credit growth limits for some banks, but the credit growth of the entire banking system would be less than 10 percent in 2020.

Analysts from Saigon Securities Incorporation (SSI) estimated an even lower rate. SSI’s recent report on the outlook for the banking industry in the second half of 2020, forecast credit growth in 2020 could be around 7.5-8.5 percent. According to them, the credit demand may continue to weaken as the country still suffered impacts of the pandemic while banks, especially large-sized ones, may not lower their credit granting standards./.

Source: VNA
en.vietnamplus.vn

Related News

Continue to handle cross-ownership in banks

Continue to handle cross-ownership in banks

VCN - The situation of excess share ownership, cross-ownership between credit institutions (CIs), CIs and enterprises, although has decreased significantly compared to previous periods, is still complicated and requires continued inspection and control.
More efficient thanks to centralized payments between the State Treasury and banks

More efficient thanks to centralized payments between the State Treasury and banks

VCN - The State Treasury (KBNN) is continuing to maintain the stable operation of payment systems within the KBNN system and payments with banking systems to ensure smooth, timely and safe operations.
Urging credit flow into production and business sectors

Urging credit flow into production and business sectors

VCN - The allocation of cash flow among investment channels is influenced by many factors such as monetary policy, economic situation and investors' risk tolerance. But for developing the economy, cash flow must be directed into production and business, thereby reinvesting into the economy.
Allocating credit room, motivation for banks to compete

Allocating credit room, motivation for banks to compete

VCN - The State Bank of Vietnam (SBV) has announced that it will allocate the credit growth limit (room) for banks that have achieved 80% of their target. This is an incentive for banks to increase their competitiveness.

Latest News

Monetary policy forecast unlikely to loosen further

Monetary policy forecast unlikely to loosen further

It will be difficult for the State Bank of Vietnam (SBV) to further loosen monetary policy due to a rising USD/VNĐ exchange rate pressure, experts said.
World Bank outlines path for Vietnam to reach high income status

World Bank outlines path for Vietnam to reach high income status

The World Bank (WB) has released a report which explores how Vietnam can upgrade its participation in global value chains to become a high-income country by 2045.
Strictly control public debt and ensure national financial security  2025

Strictly control public debt and ensure national financial security 2025

VCN – In order to achieve goal of strictly managing public debt and maintaining security and safety of the national financial system in 2025, it is necessary to ensure the borrowings and repayments of public debts is within the approved estimate; closely monitor public debt indicators to ensure that they are within the ceiling and warning thresholds approved by the National Assembly.
Revising the title of a draft of 1 Law amending seven finance-related laws

Revising the title of a draft of 1 Law amending seven finance-related laws

VCN - On November 19, 2024, the Standing Committee of the National Assembly (SCNA) discussed amendments and refinements to the draft of a law revising seven existing finance-related laws. Concluding the session, Vice Chairman of the National Assembly Nguyen Duc Hai emphasized the need for the Government to direct the drafting body and relevant agencies to collaborate closely to finalize a persuasive and widely supported report, ensuring the quality of the draft law for the National Assembly's consideration and decision.

More News

Transparency evates the standing of listed companies

Transparency evates the standing of listed companies

VCN - According to the Hanoi Stock Exchange (HNX), the number of companies placed under warning, control, or restricted trading on the listed and registered markets has increased over the past two years compared to 2022.
State-owned securities company trails competitors

State-owned securities company trails competitors

Contrary to the outstanding performances in the banking sector, the securities subsidiaries of major banks have yet to fully leverage their potential, despite numerous inherent advantages.
Strengthening the financial “health” of state-owned enterprises

Strengthening the financial “health” of state-owned enterprises

VCN - The state economy plays a key role in the socio-economic development process, but it is necessary to strengthen the financial health and competitiveness of state-owned enterprises (SOEs).
U.S. Treasury continues to affirm Vietnam does not manipulate currency

U.S. Treasury continues to affirm Vietnam does not manipulate currency

VCN - In its latest report, the U.S. Department of the Treasury has positively assessed Vietnam's monetary policy, reaffirming that Vietnam does not engage in currency manipulation.
Exchange rate fluctuations bring huge profits to many banks

Exchange rate fluctuations bring huge profits to many banks

Net profits from the foreign exchange trading segment of many banks have gained positive results thanks to a strong USD/VNĐ exchange rate fluctuations this year.
A “picture” of bank profits in the first nine months of 2024

A “picture” of bank profits in the first nine months of 2024

VCN - Pre-tax profits for banks during the first nine months of 2024 remained positive, exceeding 200 trillion VND, solidifying the sector's position as a market leader.
Many challenges in restructuring public finance

Many challenges in restructuring public finance

VCN - Restructuring public finance is an important step to improve state financial management, ensure resources are allocated reasonably and effectively, contributing to the country's sustainable development. In addition to the achieved results, the process of accelerating public finance restructuring also faces many pressures.
Tax declaration and payment by e-commerce platforms reduces declaration points and compliance costs

Tax declaration and payment by e-commerce platforms reduces declaration points and compliance costs

VCN - E-commerce platforms that declare and pay taxes on behalf of traders not only help to reduce the number of tax declaration points but also reduce the cost of compliance with administrative procedures for the whole society because only one point as the e-commerce trading platform implements tax deduction, payment and declaration on behalf of tens, hundreds of thousands of individuals and business households on the platform.
Disbursement of public investment must be accelerated: Deputy PM

Disbursement of public investment must be accelerated: Deputy PM

Deputy Prime Minister Ho Duc Phoc has called on ministries, agencies, and localities to accelerate the disbursement of public investment from now until the year-end and further tighten investment management.
Read More

Your care

Latest Most read
Monetary policy forecast unlikely to loosen further

Monetary policy forecast unlikely to loosen further

It will be difficult for the State Bank of Vietnam (SBV) to further loosen monetary policy due to a rising USD/VNĐ exchange rate pressure, experts said.
World Bank outlines path for Vietnam to reach high income status

World Bank outlines path for Vietnam to reach high income status

The World Bank (WB) has released a report which explores how Vietnam can upgrade its participation in global value chains to become a high-income country by 2045.
Strictly control public debt and ensure national financial security  2025

Strictly control public debt and ensure national financial security 2025

VCN - According to the plan for borrowing and repaying public debt and foreign debt of the country in 2025, the total borrowing demand of the Government in the year is expected to be at VND 815,238 billion, an increase of 20.6% compared to the Government'
Revising the title of a draft of 1 Law amending seven finance-related laws

Revising the title of a draft of 1 Law amending seven finance-related laws

On November 19, 2024, the Standing Committee of the National Assembly (SCNA) discussed amendments and refinements to the draft of a law revising seven existing finance-related laws.
Transparency evates the standing of listed companies

Transparency evates the standing of listed companies

According to the Hanoi Stock Exchange (HNX), the number of companies placed under warning, control, or restricted trading on the listed and registered markets has increased over the past two years compared to 2022.
Mobile Version