Commercial banks to mainly focus on credit in 2024
Customers make transactions at a bank in Hanoi. As the real estate and consumer sectors are forecast to gradually gain strong recovery in the second half of 2024, the credit growth target of 15% this year is completely feasible. (Photo: vietnambiz.vn)
Credit growth will be the main focus for the banking industry in 2024, as it closely relates to economic growth, according to analysts.In 2023, credit growth was lower than expected but improved significantly in the last months of the year. The low credit growth was primarily due to inflation, high lending interest rates, weak economy, low exports and real estate market freezing.
However, analysts believed credit will increase significantly again in 2024 thanks to a loose monetary policy and a low interest rate environment. In that context, the banking industry, which is sensitive to interest rates, will be the first to benefit.
Under a 2024 strategy report released recently, analysts from VNDirect Securities Company forecast credit growth will reach about 15% in 2024, based on the 6-6.5% GDP growth target. With the global economic recovery, firms’ loan demand for working capital is expected to increase again in the first half of 2024.
"As the real estate and consumer sectors are forecast to recover with strong growth in the second half of 2024, we believe that the credit growth target of 15% this year is completely feasible," VNDirect said in the report.
According to VNDirect, VPBank, HDBank, MB, LPBank, VIB and Techcombank are expected to lead in credit growth this year. At the same time, the banks will also have a net interest margin (NIM) larger than the industry’s average rate. VNDirect forecast NIM of the entire banking industry at 4.6% in 2024.
However, VNDirect’s analysts assessed that the business models of VPBank and Techcombank are inherently sensitive to market fluctuations. Therefore, the two banks will recover quickly following the recovery of the general market, but at the same time will be more vulnerable if the market situation changes negatively.
In contrast, HDBank, MB and VIB have stable business models, demonstrated by sustainable profit growth or low non-performing loan (NPL) ratios.
In fact, the State Bank of Vietnam (SBV) has also targeted commercial banks to focus on lending right at the beginning of this year. Instead of only allocating a part of credit growth quota for banks at the beginning of the year as previously, the SBV this year has assigned the entire credit growth target of 15% for banks from January.
According to SBV Deputy Governor Dao Minh Tu, the allocation of all credit growth quota in the first month of this year is expected to boost aggregate demand and create favourable conditions for banks to provide capital to meet the needs of economic growth as difficulties are forecast to continue in 2024./.
Related News
Latest News
![Ensure expenditure control and quick processing of public investment payment documents](https://english.haiquanonline.com.vn/stores/news_dataimages/2024/072024/26/16/102024072310412620240726164104.jpg?rt=20240726164106?240727080224)
Ensure expenditure control and quick processing of public investment payment documents
08:02 | 27/07/2024 Finance
![Perfecting the legal framework to promote upgrading the stock market](https://english.haiquanonline.com.vn/stores/news_dataimages/2024/072024/25/22/croped/132024072310541020240725221344.jpg?240726081814)
Perfecting the legal framework to promote upgrading the stock market
08:18 | 26/07/2024 Finance
![Margin loan continues hit new record](https://english.haiquanonline.com.vn/stores/news_dataimages/2024/072024/24/14/croped/fiin2024072315213620240724145347.jpg?240725092004)
Margin loan continues hit new record
09:20 | 25/07/2024 Finance
![Vietnam needs comprehensive regulatory framework to attract green financing](https://english.haiquanonline.com.vn/stores/news_dataimages/2024/072024/24/14/croped/green-finance-566620240724141129.5511800.jpg?240724021157)
Vietnam needs comprehensive regulatory framework to attract green financing
14:11 | 24/07/2024 Finance
More News
![2025 budget estimation must be practical, accurate and efficient](https://english.haiquanonline.com.vn/stores/news_dataimages/2024/072024/23/13/croped/z5648711762772-4c57b15495cfcb197f8723d749fe4aa52024071917513120240723135923.jpg?240723023829)
2025 budget estimation must be practical, accurate and efficient
14:38 | 23/07/2024 Finance
![The corporate bond market will be more vibrant in the second half of the year](https://english.haiquanonline.com.vn/stores/news_dataimages/2024/072024/22/15/croped/112024071818564620240722155216.jpg?240723082100)
The corporate bond market will be more vibrant in the second half of the year
08:20 | 23/07/2024 Finance
![Prioritize resources and promptly supplement capital for policy credit](https://english.haiquanonline.com.vn/stores/news_dataimages/2024/072024/17/14/nhcsxh-quang-ninh-1202407022251172024071616173420240717141834.jpg?rt=20240717141837?240722100700)
Prioritize resources and promptly supplement capital for policy credit
10:06 | 22/07/2024 Finance
![Measures suggested to boost startups’ access to capital](https://english.haiquanonline.com.vn/stores/news_dataimages/2024/072024/21/19/croped/measures-suggested-to-boost-startups-access-to-capital-56220240721193808.3646770.jpg?240721073852)
Measures suggested to boost startups’ access to capital
19:38 | 21/07/2024 Finance
![Inflationary pressure seen from monetary policy](https://english.haiquanonline.com.vn/stores/news_dataimages/2024/072024/18/22/croped/12024071118383020240718224146.jpg?240721094724)
Inflationary pressure seen from monetary policy
09:47 | 21/07/2024 Finance
![Banks with the problem of promoting credit growth](https://english.haiquanonline.com.vn/stores/news_dataimages/2024/072024/18/22/croped/142024070515243520240718222634.jpg?240720064949)
Banks with the problem of promoting credit growth
18:49 | 20/07/2024 Finance
![Proposal to increase Special Consumption Tax on tobacco products](https://english.haiquanonline.com.vn/stores/news_dataimages/2024/072024/19/15/croped/z5638560592107-bb19f9b3b6635b5bb407c871b1aff5ea2024071615410820240719150329.jpg?240720095049)
Proposal to increase Special Consumption Tax on tobacco products
09:50 | 20/07/2024 Finance
![Savings of individual customers at banks hit record high](https://english.haiquanonline.com.vn/stores/news_dataimages/2024/072024/19/14/croped/362413-savings20240719143011.3054670.jpg?240719023032)
Savings of individual customers at banks hit record high
14:30 | 19/07/2024 Finance
![Managing fiscal policy has achieved many positive and comprehensive results](https://english.haiquanonline.com.vn/stores/news_dataimages/2024/072024/18/22/croped/z5634201788386-8cf5a37a33eec7b9e4b5f8d46c60d6dc2024071509390720240718221008.jpg?240719021205)
Managing fiscal policy has achieved many positive and comprehensive results
14:12 | 19/07/2024 Finance
Your care
![Ensure expenditure control and quick processing of public investment payment documents](https://english.haiquanonline.com.vn/stores/news_dataimages/2024/072024/26/16/medium/102024072310412620240726164104.jpg?rt=20240726164106?240727080224)
Ensure expenditure control and quick processing of public investment payment documents
08:02 | 27/07/2024 Finance
![Perfecting the legal framework to promote upgrading the stock market](https://english.haiquanonline.com.vn/stores/news_dataimages/2024/072024/25/22/croped/medium/132024072310541020240725221344.jpg?240726081814)
Perfecting the legal framework to promote upgrading the stock market
08:18 | 26/07/2024 Finance
![Margin loan continues hit new record](https://english.haiquanonline.com.vn/stores/news_dataimages/2024/072024/24/14/croped/medium/fiin2024072315213620240724145347.jpg?240725092004)
Margin loan continues hit new record
09:20 | 25/07/2024 Finance
![Vietnam needs comprehensive regulatory framework to attract green financing](https://english.haiquanonline.com.vn/stores/news_dataimages/2024/072024/24/14/croped/medium/green-finance-566620240724141129.5511800.jpg?240724021157)
Vietnam needs comprehensive regulatory framework to attract green financing
14:11 | 24/07/2024 Finance
![2025 budget estimation must be practical, accurate and efficient](https://english.haiquanonline.com.vn/stores/news_dataimages/2024/072024/23/13/croped/medium/z5648711762772-4c57b15495cfcb197f8723d749fe4aa52024071917513120240723135923.jpg?240723023829)
2025 budget estimation must be practical, accurate and efficient
14:38 | 23/07/2024 Finance