Credit institutions expect positive demand for banking services

An ABBank transaction office in Hanoi. Capital mobilisation of the whole credit institution system is expected to increase by an average of 3.2% in the third quarter of 2023 and by 10.6% in 2023. (Photo: vietnambiz.vn)

Credit institutions forecast the demand for banking services will be buoyant in the remaining months of this year, of which credit growth will reach about 4.4% in the third quarter of 2023 and 12.5% for the whole year, according to a survey of the State Bank of Vietnam (SBV).

SBV’s latest survey on business trends of credit institutions in the third quarter of 2023 released late last week showed the business situation of the banking system in the second quarter of 2023 improved much slower than the previous quarter while pre-tax profits grew slightly but also lower than expected.

According to the assessment of credit institutions, the demand for loans, payment services and cards, and deposits improved in the second quarter of 2023, but the number of credit institutions that saw the improvement was lower than the SBV’s previous survey.

Credit institutions forecast customers' demand for banking services will grow positively in the third quarter of 2023, but the rise will be at a slower rate compared to 2022. The demand for loans is expected to increase more than that of deposits.

Capital mobilisation of the whole credit institution system is expected to increase by an average of 3.2% in the third quarter of 2023 and by 10.6% in 2023.

Outstanding loans of the banking system are expected to increase by 4.4% in the third quarter of 2023 and by 12.5% in 2023, down by 0.6% compared to the 13.7% forecast of the previous survey.

According to credit institutions, the liquidity of the banking system in the second quarter of 2023 remained solid and was more abundant than in the first quarter. Credit institutions forecast the liquidity situation in the third quarter and the whole year will continue to improve compared to 2022.

They also expect the average deposit and lending interest rates of the whole banking system to decrease by 0.31 and 0.42 percentage points in the third quarter, respectively; and decrease by 0.91 and 0.79 percentage points, for the whole year, respectively.

In the survey, they said the overall customer risk in the second quarter increased faster than the first, with 34.2% of credit institutions identifying the overall customer risk currently at a high level. A total of 48.2% forecast the customer risk will increase in 2023 compared to last year.

According to the assessment, the ratio of bad debt to outstanding loans of the banking system showed a slight increase in the second quarter, but the rate is expected to decrease in the third.

Regarding the labour and employment situation of the finance and banking industry in the second quarter, despite improving compared to the previous quarter, it did not reach the expected level. However, credit institutions expect the labour situation will be more positive in the third quarter of 2023 and the whole year./.