Commercial banks seek to boost lending from the beginning of the year

With the new credit room mechanism, banks will increase their initiative in lending and businesses' access to credit in 2024 will change in a more positive direction.

Immediately after being assigned credit targets, banks immediately implemented solutions to boost lending, targeting good customers and promising projects from the beginning of the year with reasonable capital levels.

More proactive in granting credit

With the trend of aggregate demand continuing to decline, the State Bank has set a target of 15% credit growth in 2024. Based on the current outstanding debt of about VND13.56 trillion, this means that nearly VND2 trillion in credit will be increased in 2024.

In particular, the State Bank proactively assigned credit room to each commercial bank from the beginning of the year so that credit institutions could decide and proactively plan their business, without the mechanism of asking and giving. This is a difference in the State Bank's credit management compared to before (capital was divided into many stages and banks were required to submit requests for room adjustment consideration).

To facilitate credit institutions to provide credit capital to meet economic growth needs, the State Bank of Vietnam has assigned the entire credit growth target of 15% for 2024.

For Agribank , due to being granted a credit growth limit nearly double that of last year, equivalent to about 175,000 billion VND, the allocation to seasonal sectors during the Lunar New Year and the first quarter was immediately implemented. Right from the beginning of the year, Agribank also adjusted the interest rates for medium and long-term loans for production and business, loans for living needs with a fixed interest rate of 7%/year and at the same time reduced the interest rate for real estate loans by 0.5%/year.

Vietcombank representative also said that in the first days of 2024, which is also the time when the production and consumption season will be the most bustling and exciting in preparation for the Lunar New Year, this is also the time when it is considered necessary to accelerate so that credit capital continues to be delivered to the addresses that need to be absorbed most effectively.

This year, Vietcombank aims to promote retail credit growth, including consumer loans for home purchases, along with expanding Green Credit, import-export and other areas.

Mr. Nguyen Hung, General Director of TPBank, also said that banks will be more proactive in distributing their credit growth.

According to Mr. Hung, in the first months of 2023, banks are cautious about lending while calculating whether they will have enough room by the end of the year and whether they need to reserve credit for some customers they want to focus on, large customers or not.

“With the current mechanism of clear criteria, banks will know the conditions, scores and ratings of their bank and will be able to calculate their own credit limit to be more proactive,” Mr. Hung emphasized.

With a credit growth limit allocated higher than the industry average from the beginning of the year, LPBank expects to disburse about 40% in the first 6 months of the year and the remaining 60% will be focused on the second half of the year.

Ms. Nguyen Anh Van, Deputy General Director of LPBank said: “With room granted from the beginning of the year, we will proactively source capital to meet the State Bank's capital safety requirements, with terms and quantities to meet short, medium and long-term credit needs.”

Vietcombank offers preferential loan interest rates of only 5.3%-6.6%/year for individual customers, business owners, and private enterprise owners to borrow additional working capital for production and business. (Photo: PV/Vietnam+)

Immediately after being assigned credit room, commercial banks proactively promoted credit from the beginning of the year, through preferential interest rate packages, reducing lending interest rates and simplifying lending procedures.

Vietcombank announced the implementation of a preferential interest rate program for short-term loans for production and business with a credit package of 160,000 billion VND.

The program applies to individual customers, business owners, and private enterprise owners who need to borrow additional working capital for production and business with a floor interest rate of only 5.3% - 6.6%/year for a period of 3 to 12 months.

Sacombank has also proactively increased the loan package for production and business for enterprises and individual customers by 20,000 billion VND with interest rates from 3% - 5.5%/year. In addition, Sacombank has launched a new loan package for living with a limit of 10,000 billion VND with interest rates from only 6.5%/year, fixed for 6 months, 12 months or 24 months.

VietinBank and ACB also launched Green Credit packages from VND2,000-5,000 billion, with interest rates from only 5.8%-6.2%/year. The selected loans maintain incentives for up to 24 months and are exempted or reduced from early repayment fees.

In addition, some banks have also reduced home loan interest rates by 1%-2% compared to the end of last year, down to 5.9%-6.5%/year to stimulate consumption.

Is credit growth positive?

According to experts, with the new credit management mechanism of the State Bank, businesses' access to credit in 2024 will change in a more positive direction. Banks will increase their initiative in lending, which is an advantage for them and also an advantage for businesses - the bank's customers.

Dr. Can Van Luc - BIDV chief economist said that the State Bank's assignment of a common credit growth target of 15% to banks is meaningful in creating a more proactive and flexible mechanism in management and supervision. However, the management agency needs to have measures to flexibly control banks to direct credit flows into priority areas, into growth-driving areas, avoid overheating credit, and limit competition in capital mobilization interest rates to control interest rates and credit quality.

To promote credit growth in 2024, Ms. Truong Hoang Diep Huong - Banking Academy believes that the real estate market is a major factor determining the demand for personal credit. Accordingly, the Government will also continue to take measures to help support and promote the real estate market. In addition, in the coming time, when adjusting the salary policy, increasing the basic salary in 2024... will be a factor affecting people's consumption demand and partly affecting consumer credit.

Deputy Governor of the State Bank of Vietnam Dao Minh Tu said that granting credit room once a year will help commercial banks have a target to strive for. Achieving this credit limit is the responsibility of the banking sector in providing capital for the economy.

“The credit growth target of 15% is within the current calculation conditions. If the macroeconomic conditions are stable in the middle and end of the year, allowing for good control of inflation, ensuring the flow of counterpart capital and necessary subjects as well as the safety of the credit institution system, the State Bank will allocate more room to commercial banks for credit growth,” Deputy Governor Dao Minh Tu affirmed./.

Source: https://www.vietnamplus.vn/cac-ngan-hang-thuong-mai-tim-cach-day-manh-cho-vay-ngay-tu-dau-nam-post922599.vnp

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