Credit growth higher than expected

By the end of May 2025, credit growth in the entire banking sector had reached 6.52%, far exceeding the same period in 2024 (up 2.41%), higher than expected; in which some large banks even grew beyond 9%.

Thus, the credit growth target of 16% for the whole year of 2025 is within reach.

Outstanding credit increased to 16.6 million billion VND

With a credit growth rate of 6.52%, in the first 5 months of 2025, the total outstanding credit balance of the entire economy increased to more than 16.6 million billion VND. This is a record increase in outstanding debt in the first 5 months of the year. With a credit growth rate of 16% this year, equivalent to 2.5 million billion VND, the credit space is still more than 1.6 million billion VND in the next nearly 7 months.

Customers transact at the Vietnam Joint Stock Commercial Bank for Investment and Development. Photo: Nguyen Quang

Particularly for Hanoi , as of the end of May, credit growth reached VND 4,881 trillion, up 1.06% compared to the end of April and up 8.32% compared to the end of 2024. Credit capital continues to be prioritized for allocation to production, business and essential industries according to the Government's orientation, while supporting customers to develop production and business. Of which, outstanding short-term loans reached VND 2,127 trillion, up 1.47% compared to the end of April and up 10.51% compared to the end of 2024; outstanding medium- and long-term loans reached VND 2,754 trillion, up 0.75% compared to the end of 2024 and up 6.69% compared to the end of 2024.

Outstanding loans under the credit program in Hanoi for priority areas include: Small and medium enterprises accounting for 20.79%; agricultural and rural programs (10.32%); export loans (5.13%); loans for supporting industries (2.31%); loans for high-tech enterprises (0.35%); loans under the program connecting banks with enterprises (11.34%).

Regarding capital mobilization, the total mobilized capital of credit institutions in the area reached about 6.27 million billion VND, an increase of 0.56% compared to the end of 2024, an increase of 3.51% compared to the end of 2024. Notably, the bad debt ratio of credit institutions only accounts for 1.59% of total outstanding debt, much lower than the allowable threshold of 3%.

The leader of the State Bank of Vietnam, Region 1 branch, said that credit institutions' prevention and control of bad debt not only improves credit quality but also ensures the goal of restructuring the system of credit institutions associated with handling bad debt and ensuring liquidity of credit institutions.

Meanwhile, in Ho Chi Minh City, as of the end of May, outstanding credit reached VND4,085 trillion, up 3.6% compared to the end of 2024 and up 13.2% over the same period last year. Deputy Director of the State Bank of Vietnam, Region 2 Branch Nguyen Duc Lenh affirmed that the interest rate level continuing to be maintained at a low level is a key factor supporting businesses, business households and cooperatives to reduce loan costs, expand production and business, thereby promoting bank credit growth.

The 16% target is feasible.

Regarding commercial banks, although the 5-month credit growth figures have not been fully announced, some banks have also "revealed" positive results in credit activities. Representatives of banks all said that customers' credit capital demand is increasing again, especially when public investment is being boosted and capital for young people to buy houses has quite low interest rates, from 5.5%/year in the first 3 years.

Most recently, the leader of the Vietnam Joint Stock Commercial Bank for Industry and Trade (VietinBank) said that as of June 10, this bank achieved a credit growth of 9.1% compared to the end of last year, the bank with the strongest credit growth rate in the Big4 group. As of the end of May, VietinBank's total assets reached VND2.5 million billion, an increase of 7.5% compared to 2024; outstanding credit reached VND1.9 million billion, an increase of 8.8%.

Other banks in the Big4 group are the Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV), the Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank), and the Bank for Agriculture and Rural Development of Vietnam (Agribank). Although they have not officially announced their figures, credit growth is expected to be high at 5.8-7%, with outstanding credit reaching more than 1 million billion VND.

The rapid expansion of credit capital has contributed positively to the total social investment, supporting economic growth to achieve the set target. However, with this year's credit growth rate of 16%, equivalent to VND 2.5 million billion, the banking system still needs a lot of effort because there is still more than VND 1.6 million billion that needs to be disbursed in the last 7 months of the year.

Experts say that with more than 1.6 million billion VND in loans from now until the end of the year, it is enough to ensure economic growth at 8% and control inflation below 4.5%. Whether this amount of credit capital can be absorbed or not in the last months of the year depends on the export sector, while external factors are challenging, especially with tariff policy.

Governor of the State Bank Nguyen Thi Hong affirmed that the credit growth target of 16% for 2025 is feasible, especially with the determination of commercial banks and support from the Government. This is part of the State Bank's management strategy, aiming to support economic growth, control inflation and ensure the safety and efficiency of the banking system.

Source: https://hanoimoi.vn/tang-truong-tin-dung-cao-hon-ky-vong-705796.html