How is credit flowing into risky areas?

VCN- The State Bank of Vietnam (SBV) recommends credit institutions to tighten control over the flow of credit for some risky sectors, including real estate, securities, and corporate bonds.
Flexible monetary policy helps recover credit growth amid pandemic Flexible monetary policy helps recover credit growth amid pandemic
Vietnam’s taxman says VAT collection related to L/Cs lawful Vietnam’s taxman says VAT collection related to L/Cs lawful
Credit institutions asked to tighten loans in “overheating” sectors: SBV Credit institutions asked to tighten loans in “overheating” sectors: SBV
How is credit flowing into risky areas?

The SBV expects credit growth to hit between 5.5% and 6% by the end of June. Photo: Internet.


The credit growth is expected to hit between 5.5% and 6% by the end of June, according to Nguyen Tuan Anh, Director of the Department of Credit Policies for Economic Sectors at SBV at the press conference on monetary policy management and banking activities on June 21.

Credit for agricultural sector and small and medium-sized enterprises and export is expected to increase by 4.8%, 3.9% and 9%, respectively.

Credit for supporting industries and high-tech enterprises is predicted to rise by 6.94% and 14.5%, respectively.

The real estate growth in the last three years tends to decrease. The real estate credit grew by 26.76%, 21%, and 11.89% in 2018, 2019 and 2020, respectively due to the impact of the Covid-19 pandemic.

As of April, real estate credit increased 4.83% and is forecast to rise by 5.5% by June. “Thus, real estate credit growth is still kept a close watch by the SBV,” Anh said.

In addition, the real estate prices soared in March and April, especially the land plot segment. Currently, the price decreases and the market are controlled in a more stable manner due to direction from the Government and local governments.

However, the SBV said real estate credit is still risky, so credit institutions should closely control the credit for this sector.

By the end of June, the securities lending accounts for 0.48% of the total outstanding loan of about VND46,700 billion. This growth rate has not changed compared to April and May.

Securities is interested in by people and stock prices fluctuate constantly. In the future, the SBV will request credit institutions to closely monitor lending in this sector and strengthen measures to monitor the use of borrowers, Director Nguyen Tuan Anh said.

By the end of April, corporate bonds account for 2.76% of the total outstanding loan of about VND227.7 trillion. It is forecast to increase by VND2,000 billion by the end of June.

This increase is not too high but corporate bonds are also a sensitive sector, so the SBV asked credit institutions to pay close attention to the investment in corporate bonds.

According to SBV Deputy Governor Dao Minh Tu, the current development of the stock market and corporate bonds may have many problems. Therefore, the role of monetary policy is very important, providing capital for the economy while controlling inflation and ensuring safety for operation of commercial banks.

“All banks want to lend with large amount, but the “bubble” should be prevented, because when the situation falls, it will cause a large amount of bad debt for banks. In April, the SBV held a meeting to notify banks that lent with large amount and high lending rate in risky sectors,” Deputy Governor Dao Minh Tu said.

Therefore, the SBV will continue to requests credit institutions to increase credit effectively, focusing on production and priority areas; strictly control credit for potential risk areas; provide solutions to remove difficulties in accessing bank credit, create favorable conditions in bank credit loans for businesses and people.

By Huong Diu/Ngoc Loan

Related News

Vietnam

Vietnam's economy is recovering well

VCN - According to Dr. Nguyen Quoc Viet, Deputy Director of the Vietnam Institute for Economic and Policy Research (VEPR), by the end of the third quarter of this year, Vietnam's economy had recovered relatively well amid optimism about the overall growth of the world economy in late 2024 and 2025.
Vietnam - UAE trade grows to billions of dollars

Vietnam - UAE trade grows to billions of dollars

VCN - Updated by the General Department of Customs by the end of September 2024, bilateral trade between Vietnam and the United Arab Emirates (UAE) sees a year-on-year increase of more than US$1.4 billion to nearly US$5 billion
Ensuring reasonableness upon enforcement of regulations in "1 law amending 7 laws"

Ensuring reasonableness upon enforcement of regulations in "1 law amending 7 laws"

VCN - According to the representative of the Vietnam Chamber of Commerce and Industry (VCCI), the Ministry of Finance and the National Assembly Committees are urgently collecting opinions to complete the draft Law amending seven Laws, to ensure that the issued regulations are reasonable and remove difficulties for businesses.
Ministry of Finance proposes to choose the option of reducing land rent by 30% in 2024

Ministry of Finance proposes to choose the option of reducing land rent by 30% in 2024

VCN - The Ministry of Finance has just completed the draft Decree of the Government regulating the reduction of land rent in 2024. Accordingly, in the latest Draft, the Ministry of Finance directly proposed to choose the reduction level according to option 2 of 30%.

Latest News

Removing legal hurdles in regular spending for capital assets

Removing legal hurdles in regular spending for capital assets

VCN - Mr. Bui Anh Binh, Deputy Director of the Department of Public Administration (Ministry of Finance) emphasized that the issuance of Decree No. 138/2024/ND-CP has created an important legal corridor, promptly removed obstacles, and created conditions for ministries, branches, and localities to proactively use regular expenditures to carry out tasks and projects outside the approved medium-term public investment plan, and to be proactive in performing assigned tasks.
M&A activities show signs of recovery

M&A activities show signs of recovery

Mergers and acquisitions (M&A) activities in Vietnam have been showing signs of recovery in recent months as several large companies announced finished deals, which may create a ripple effect in the M&A market.
Fiscal policy needs to return to normal state in new period

Fiscal policy needs to return to normal state in new period

VCN - To recover the economy during and after the Covid-19 pandemic, fiscal policy has been flexibly and promptly managed, becoming a solid foundation to help businesses and the economy gradually overcome difficulties. After nearly 5 years, although there are still difficulties, the economy is gradually returning to a high growth trajectory. In that context, it is necessary to let fiscal policy return to normal state.
Ensuring national public debt safety in 2024

Ensuring national public debt safety in 2024

VCN - Since the beginning of the year, public debt management has been conducted proactively and effectively, meeting the need of raising capital for development investment. At the same time, debt indicators by the end of 2024 are guaranteed within the ceiling and safety threshold approved by the National Assembly, ensuring national financial security, increasing proactive response to risks arising from external and internal causes of the economy.

More News

Removing many bottlenecks in regular spending to purchase assets and equipment

Removing many bottlenecks in regular spending to purchase assets and equipment

VCN - Decree No. 138/2024/ND-CP, which has just been issued, is expected to contribute to resolving bottlenecks in allocating funds for purchasing assets and equipment; renovating, upgrading, expanding, and constructing new construction items in projects that have been invested in and constructed in the past.
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.
Striving for average CPI not to exceed 4%

Striving for average CPI not to exceed 4%

VCN - According to the report of the Ministry of Finance, there are still some factors that put pressure on price levels in the remaining months of 2024, so the Ministry has updated 2 scenarios of average inflation in 2024 increasing in the range of 3.7-3.92%.
Delegating the power to the government to waive, lower, or manage late tax penalties is suitable

Delegating the power to the government to waive, lower, or manage late tax penalties is suitable

VCN - Discussing in groups about the project "1 law amending 7 laws" in the financial sector according to the program of the 8th Session on October 29, 2024, National Assembly delegates proposed that the Government should be assigned to make specific regulations on decentralization, granting the right to exempt and reduce taxes, and handling penalties for late payment of taxes...
Removing difficulties in public investment disbursement

Removing difficulties in public investment disbursement

VCN - According to the report of the Investment Department (Ministry of Finance), the estimated disbursement from the beginning of the year to October 31, 2024 is VND 355,616.1 billion, reaching 47.43% of the 2024 plan, reaching 52.29% of the plan assigned by the Prime Minister.
State-owned commercial banking sector performs optimistic growth, but more capital in need

State-owned commercial banking sector performs optimistic growth, but more capital in need

VCN - According to the report sent to the National Assembly before the 8th Session of the Government on investment, management and use of state capital in enterprises nationwide in 2023, the business performance of the state-owned commercial banking sector achieved positive growth.
Stipulate implementation of centralized bilateral payments of the State Treasury at banks

Stipulate implementation of centralized bilateral payments of the State Treasury at banks

VCN - The Ministry of Finance (MOF) gathers feedback on the draft Circular regulating the management and use of accounts of the State Treasury opened at the State Bank of Vietnam (SBV) and commercial banks.
Rush to finalize draft decree on public asset restructuring

Rush to finalize draft decree on public asset restructuring

VCN - According to the Ministry of Finance, the draft Decree regulating the rearrangement and handling of public assets is being urgently completed by the Ministry of Finance to submit to the Government for promulgation.
Inspection report on gold trading activities being complied: SBV

Inspection report on gold trading activities being complied: SBV

The State Bank of Vietnam (SBV) has announced that inspections on compliance with legal policies in gold trading activities of credit institutions and gold trading businesses have been completed and an inspection report is being compiled.
Read More

Your care

Latest Most read
Removing legal hurdles in regular spending for capital assets

Removing legal hurdles in regular spending for capital assets

Mr. Bui Anh Binh, Deputy Director of the Department of Public Administration (Ministry of Finance) emphasized that the issuance of Decree No. 138/2024/ND-CP has created an important legal corridor
M&A activities show signs of recovery

M&A activities show signs of recovery

Mergers and acquisitions (M&A) activities in Vietnam have been showing signs of recovery in recent months as several large companies announced finished deals, which may create a ripple effect in the M&A market.
Fiscal policy needs to return to normal state in new period

Fiscal policy needs to return to normal state in new period

VCN - To recover the economy during and after the Covid-19 pandemic, fiscal policy has been flexibly and promptly managed, becoming a solid foundation to help businesses and the economy gradually overcome difficulties. After nearly 5 years, although there
Ensuring national public debt safety in 2024

Ensuring national public debt safety in 2024

VCN - Since the beginning of the year, public debt management has been conducted proactively and effectively, meeting the need of raising capital for development investment. At the same time, debt indicators by the end of 2024 are guaranteed within the ce
Removing many bottlenecks in regular spending to purchase assets and equipment

Removing many bottlenecks in regular spending to purchase assets and equipment

Decree No. 138/2024/ND-CP, which has just been issued, is expected to contribute to resolving bottlenecks in allocating funds for purchasing assets and equipment
Mobile Version