Credit growth remains far from government’s target

Credit within the banking system to the end of May 2024 increased by only 2.41% against the end of 2023, far from the credit growth target, the Government reported.

The Government has set a credit growth target of 5% for the first six months of 2024 and 15% for the whole year.

Credit growth of banks in Ho Chi Minh City and Hanoi by the end of May 2024 was double that of the average rate elsewhere in Vietnam.

According to newly released data from the Hanoi Statistics Department, total outstanding loans in the capital city by the end of May 2024 reached 3.8 quadrillion VND, an increase of 1.14% compared to the previous month and 5.09% compared to the end of 2023.

Of the total, short-term outstanding loans were 1.6 quadrillion VND, an increase of 6.61 % compared to the end of last year and medium and long term outstanding loans reached more than 2.19 quadrillion VND, an increase of 4.01%.

According to the Hanoi Statistics Department, credit institutions in the capital have promoted credit growth through offering many preferential credit programmes and packages and applying flexible interest rate policies.

The average lending interest rate is 7.5-9.7% per year, while the maximum short-term loan interest rate for priority sectors, including agriculture, rural areas, exports and SMEs, is about 3.6% per year.

Meanwhile, the HCM City Statistics Department reported the total outstanding loan of credit institutions in the city as of May 31 was estimated at 3.61 quadrillion VND, an increase of 4.5% compared to the end of 2023. Of which, short-term outstanding loans were at nearly 1.72 quadrillion VND, up 6.1% compared to the end of last year, and medium and long term outstanding loans were more than 1.89 quadrillion VND, up 3.1% compared to the beginning of the year.

As for capital mobilisation, similar to the general trend of the whole country, capital mobilisation of credit institutions in the two cities decreased compared to the beginning of the year.

Banks in Hanoi raised nearly 5.32 quadrillion VND by the end of May 2024, an increase of 0.15% compared to the previous month and a decrease of 0.38% compared to the end of 2023. Of the total, deposits reached 4.67 quadrillion VND and issuance of valuable papers reached 641 trillion VND.

Deposit interest rates offered by Hanoi -based banks at the end of May increased slightly compared to February and March, reaching 0.1-0.5% per year for non-term deposits, 1.8-3.3% per year for 1-6 month deposits, 3-5.2% per year for 6-12 month deposits and 4.1-5.7% per year for deposits above 12 months.

In HCM City, by the end of May, the total mobilised capital of credit institutions was estimated at more than 3.52 quadrillion VND, up 0.2% compared to the previous month and down 1.2% compared to the beginning of the year./.