VCN- Preparing abundant credit sources along with the continuing implementation of supportive policies of the banking industry will give additional motivation for enterprises to restore production activities after the pandemic and regain growth momentum.
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Credit goes hand in hand with economic recovery
Data from the State Bank of Vietnam (SBV) updated to the end of March 2022, shows that credit growth reached 5.04%, according to the information of Standing Deputy Governor of the State Bank Dao Minh Tu announced at the meeting.
The Government's monthly press conference took place in March. Deputy Governor Dao Minh Tu assessed that this increase was very high compared to previous years. This shows that the economy is showing very positive signals.
Along with the Government's drastic solutions to restore the economy, the credit growth results are a positive sign in the recovery and development of enterprises.
In the report for the first quarter of 2022, the General Statistics Office also assessed that, in the context of the economy facing many difficulties due to the impact of the Covid-19 pandemic, the State Bank of Vietnam continued to keep the operating interest rate unchanged, maintain a low-cost capital source so that credit institutions can continue to reduce lending interest rates and support the recovery of the economy.
In Ho Chi Minh City, the major economic center of the country, which suffered the heaviest consequences of the Covid-19 pandemic in 2021, also recorded very positive credit growth.
In the first three months of 2022, credit in Ho Chi Minh City was estimated to increase by 3.65% and 13.1% over the same period in 2021, meeting capital needs for economic recovery. Particularly, some sectors such as the processing and manufacturing industry and tourism, hotel and restaurant had higher credit growth rates. Specifically, the group of processing and manufacturing industries increased by over 5%; accommodation and food services increased by 9.58%; transportation and warehousing increased by 9.06%; mining increased by 6% compared to the end of 2021.
Nguyen Duc Lenh, Deputy Director of the State Bank branch of Vietnam in Ho Chi Minh City, said that since the beginning of the year, after the pandemic was controlled, the State Bank of Vietnam had continued to support and remove difficulties for enterprises through various mechanisms under Circular 01/2020/TT-NHNN, Circular 03/2021/TT-NHNN and Circular 14/2021/TT-NHNN on restructuring debt, exempting and reducing the interest rate, and keeping the debt group unchanged.
At the same time, provided new loans with low interest rates to create conditions for enterprises, cooperatives and business households in the area to maintain, stabilize and restore production and business development. Up to now, the total value of support for enterprises reached VND3.2 trillion with over 1.85 million customers supported. Thereby, creating favorable conditions for enterprises to reduce debt repayment pressure, reduce borrowing costs to maintain production and business stability, overcome difficulties and recover growth.
In addition, Ho Chi Minh City's banking industry also continues to effectively implement national credit programs and those of the People's Committee of Ho Chi Minh City, creating conditions for priority areas for growth and ensuring social security.
According to Ho Chi Minh City Bank for Social Policies, outstanding loans of policy credit programs reached nearly VND7,200 billion, up 2.9% compared to the end of 2021. In which, outstanding loans for job settlement programs accounted for the highest proportion (57.3%), making an important contribution to creating jobs and ensuring social security in the area.
Capital is ready for growth
The report of the General Statistics Office also showed very important signals about the results of the business trend survey of enterprises in the processing and manufacturing industry.
Specifically, in the second quarter of 2022, 50% of enterprises assessed that the trend would be better compared to the first quarter; 32.3% of enterprises said that the production and business situation would be stable and 17.7% of enterprises forecasted more difficulties. In which, the foreign-invested enterprise sector was the most optimistic with 84.7% of enterprises forecasting that the production and business situation in the second quarter would be better and stable compared to the first quarter; this rate among state-owned enterprises and non-state enterprises was 83.6% and 81.2%, respectively.
Notably, 46.6% of enterprises expected the number of orders to increase in the second quarter and over 37% of enterprises expected to have stable orders. Regarding export orders, over 40% of enterprises expected to increase new export orders, and over 45% of enterprises expected them to be stable.
To meet the capital needs of enterprises to support economic recovery, in 2022, the credit growth of the entire banking industry is oriented at 14% by the SBV and adjusted in accordance with the actual situation. Accordingly, many banks have also planned to provide hundreds of trillions of dong of credit to the economy.
Specifically, in the report on the 2022 plan expected to be submitted to the Annual General Meeting 2022 of Shareholders of MSB, the bank expected the credit balance in 2022 to be at VND130,752 billion, equivalent to a level of 25% growth compared to 2021.
At Sacombank, the credit growth plan in 2022 was set at 12%, corresponding to a credit balance of VND435,000 billion. Based on the allowable credit growth limit of the State Bank and the business situation in 2022, Sacombank would adjust its deposit and loan growth targets accordingly.
VIB even set a plan to increase credit up to 30%, equivalent to a loan balance of VND265,600 billion. According to the bank's management, there was currently no separate credit target for each bank, but the 30% target set by VIB is based on the bank's development capacity and actual risk management ability. In fact, in 2019, VIB was granted a credit line.
The Board of Directors of ACB also assessed that although banking activities in 2022 would be more difficult, there were still opportunities arising from the world economy's continued recovery and the domestic economy had bottomed out and would go up.
ACB forecasted that credit demand would increase, especially from the second quarter of 2022, thus requiring a longer-term preparation of capital. Accordingly, ACB set a credit growth target of 10% in 2022, corresponding to a credit size of VND398,299 billion and would be adjusted upon approval of the State Bank.
Similarly, many other banks also set high credit growth targets in 2022 such as HDBank increasing by 20% (VND256,060 billion), OCB increasing by 25% (VND129,493 billion), Eximbank increasing by 10% (VND127,149 billion).
By Nguyen Hien/ Binh Minh