Credit growth reached its highest level in years.
According to experts, several factors contributed to the highest credit growth in 10 years. First, a positive macroeconomic foundation. The country's total import and export turnover exceeded $800 billion, and industrial production grew by double digits. Furthermore, the end of the year is always a peak season for production and business, with a strong increase in demand for capital for new orders, inventory, and business expansion.
Besides the demand for capital from domestic businesses, Dr. Chau Dinh Linh from the Ho Chi Minh City University of Banking stated that the demand for capital from FDI businesses is also increasing. Along with this is the recovering consumer demand. However, the important driving force behind credit growth is the continued low lending interest rates; specifically, by the end of October, the average lending interest rate for new transactions had decreased to 6.88%/year, 0.1 percentage point lower than at the end of 2024.
 |
| Directing credit flows to the right places. |
Over the past period, the State Bank of Vietnam has synchronously and flexibly managed monetary policy tools to regulate VND liquidity, thereby supporting market liquidity, contributing to the stability of the money market, and creating conditions for credit institutions to provide capital at reasonable costs to the economy.
In addition, commercial banks themselves are striving to reduce costs and seek cheaper sources of capital in order to maintain lending interest rates at appropriate levels.
According to Ms. Nguyen Thi Huong, Deputy General Director of ABBank, the digitalization strategy has helped increase the volume of online transactions from individual customers by 49% compared to the same period last year. Simultaneously, the bank has boosted demand deposits (CASA) from the corporate sector through payroll services via bank accounts and comprehensive cash flow management solutions. As a result, ABBank has secured low-cost, stable, and sustainable funding sources, creating a competitive advantage in lending interest rates.
Currently, CASA (Currently Accepted Savings Account) is becoming an important source of low-cost funding for banks to maintain favorable lending interest rates. To attract and maintain this funding source, banks are forced to accelerate digital transformation, increase convenience and improve the experience on electronic transaction channels to retain customers.
Quality control is needed.
Despite positive credit growth, experts note that the focus should be on the quality of capital flows, not just the quantity. In other words, ensuring that capital is allocated to the right places is crucial. Only when the efficient use of capital is guaranteed can credit risk be controlled and credit growth be sustainable.
Banks are also focusing on lending in this direction. Mr. Tu Tien Phat, General Directorof ACB, emphasized that although ACB's credit growth remains positive and higher than the industry average, the bank does not pursue loan expansion "at all costs" but maintains a balanced policy between growth and risk management. ACB has identified areas with potential future risks and aims to tightly control them, avoiding excessive concentration of credit in these areas.
Ms. Pham Thi Thanh Hoai, a member of the Board of Directors of VietinBank, stated that the bank has been allocated a credit growth limit of approximately 17% by the State Bank of Vietnam, and its outstanding loans are currently approaching this level. Therefore, the bank is shifting its focus to more carefully screening customers with good credit quality, genuine capital needs, and sustainable development orientations, creating a foundation for the period up to 2026.
From an operational perspective, the State Bank of Vietnam (SBV) has consistently required commercial banks to strictly control credit to sectors with potential risks, ensuring that capital flows to the right places and that lending activities adhere to the principles of safety and efficiency. Along with this operational guidance, the SBV issued Circular 14/2024/TT-NHNN on capital adequacy ratios, marking a significant step in bringing the Vietnamese banking system closer to Basel III, raising requirements for capital quality and structure, and replacing the credit regulation mechanism based on limits with a risk-based capital management tool, thereby regulating credit through the cost of capital.
Circular 14 stipulates higher risk weightings for real estate loans in high-risk or speculative segments, thereby forcing credit institutions to review their portfolios, reduce the proportion of credit to high-risk sectors, and prioritize capital for the production and business sector, essential sectors, and safer areas. This new mechanism is expected to contribute to a more rational allocation of credit in the economy, limit the accumulation of risks, and create a foundation for sustainable credit growth.
In the long term, to maintain sustainable economic growth, Dr. Chau Dinh Linh emphasized that it cannot rely solely on bank credit. According to him, the key is for the capital market to develop in balance with the credit market to meet the medium- and long-term capital needs of businesses and the economy.
“Regarding the stock market, the primary market must truly generate new capital for businesses, while the secondary market needs sufficient depth and liquidity to support the smooth raising of additional capital. Along with that, restructuring the corporate bond market towards transparency and stability is extremely important, aiming to bring this channel into operation according to standards and become an effective source of medium and long-term capital, contributing to sharing the pressure on the banking system,” analyzed Dr. Chau Dinh Linh.
Source: https://thoibaonganhang.vn/kiem-soat-chat-an-toan-tin-dung-dua-dong-von-dung-huong-175090.html
Comment (0)