Agricultural and rural lending, HDBank's secret to promoting credit

Cho vay nông nghiệp - nông thôn, bí quyết thúc đẩy tín dụng của HDBank - Ảnh 1.

Focus on agriculture and rural areas

According to the financial report, in the second quarter of 2023, HDBank continued to achieve outstanding business results compared to the industry. Specifically, as of June 30, 2023, HDBank's total assets reached VND 483,936 billion, an increase of 26% over the same period last year; total capital mobilization reached VND 430,123 billion, an increase of 17.4% over the beginning of the year, of which mobilization from customers reached VND 309,645 billion, an increase of 44% .

Notably, total outstanding debt reached over 293,129 billion VND, up 9.3 % compared to the beginning of the year. Maintaining the pace of credit growth, the digitalization momentum continues to expand, helping to strongly increase the number of new customers and optimize operations. In the first 6 months of the year, HDBank has achieved nearly 5,500 billion VND in pre-tax profit . If the current profit growth direction is maintained, 2023 will be the 10th consecutive year of continuous growth for HDBank .

Cho vay nông nghiệp - nông thôn, bí quyết thúc đẩy tín dụng của HDBank - Ảnh 2.

HDBank's continuous growth is thanks to the bank being on the right track: Focusing on lending to agriculture and rural areas .

According to the representative of HDBank's leadership, in the rural agricultural market, the Bank has successfully financed large-scale chains such as Loc Troi chain, CP chain, Unilever chain, etc. This is also the area where small and medium-sized enterprises (SMEs) and household businesses are concentrated, for which HDBank is spending up to VND 143,000 billion, equivalent to more than 52% of total outstanding loans, as of June 30, 2023.

Investing in the pillars of the economy

It is not until now that HDBank considers agricultural lending an important pillar in the credit structure. The development history of HDBank has marked an important milestone: Merging with DaiABank. DaiABank was previously the leading bank in the Southeast region and then became the core bank of the entire Mekong Delta. Through the merger, this advantage was quickly expanded and gradually increased coverage in the agricultural and rural areas nationwide, along with the activity of regulating the spread of resources to the markets to achieve sustainable credit growth.

Agriculture and rural areas play an important role in the development of a country. Investing in this sector not only helps improve the lives of farmers, but also contributes to the stability and sustainability of the economy. In promoting agricultural and rural development, the priority of banks in lending capital plays an extremely important and meaningful role.

Over the years, the State Bank has always directed commercial banks to participate in lending for agricultural and rural development , especially high-tech agriculture and lending according to supply chains and value chains . In addition to policies supporting compulsory reserves and interest rates , in 2017, the State Bank issued Decision No. 813/QD-NHNN to regulate capital sources for the agricultural and rural sectors, an economic sector in which Vietnam has many advantages.

Responding to that orientation of the State Bank, for many years HDBank has promoted the provision of products and services in the driving force of the economy, including rural agriculture, green credit, production and business, renewable energy , rural agriculture, lending activities for projects to reduce energy consumption, reduce _{CO2 emissions} , waste treatment/recycling, etc.

In this strategic direction , HDBank also signed a cooperation agreement of hundreds of millions of USD in capital and consulting activities. from many international organizations such as IFC (International Finance Corporation), DEG (Development Finance Institution of the German Reconstruction Bank KFW), Proparco (French Development Finance Institution), Affinity International Investment Fund... to energize green finance for Vietnam's agriculture sector.

Not only in the current period when the economy is facing many difficulties and challenges, but also before, during the Covid-19 pandemic or the period when the financial market faced many shocks due to fluctuations in the real estate and bond sectors, rural agriculture still grew steadily and was a pillar of the economy. With a development strategy associated with this pillar , HDBank has achieved sustainable growth for many consecutive years.

In fact, Vietnam's agricultural sector, especially high-tech agriculture, needs huge capital resources to improve technology, machinery, supply chains, etc. improve overall labor productivity. Therefore, participating in lending for rural agricultural development, especially high-tech agriculture, means that banks accompany farmers and businesses, not only to create high-quality agricultural products but also to support the industry in shifting from traditional agriculture to modern agriculture. Lending for agriculture also means that banks join hands with the State in the journey of hunger eradication, poverty reduction, environmental protection, sustainable development, etc.

Statistics show that by focusing on agricultural and rural lending, in addition to strictly controlling risks and comprehensively applying Basel III, HDBank continues to be the bank with the highest profitability in the Vietnamese banking system with ROAA, ROAE reaching over 2% and over 22% respectively in the first 6 months of 2023.