Credit growth reached 14.5 million billion VND but there is still much room for capital provision.

Prime Minister chairs conference with private banks - Photo: VGP

On the afternoon of September 21, Prime Minister Pham Minh Chinh chaired a meeting of the Government Standing Committee working with joint stock commercial banks (JSCs) on solutions to contribute to the country's socio -economic development.

Banks join hands with people and businesses

In his opening remarks, the Prime Minister said that this conference assesses monetary policy, especially the priority given to growth, inflation control, ensuring major balances, and macroeconomic stability. Accordingly, opinions on macroeconomic policy management are needed, including issues related to liquidity, interest rates, exchange rates, credit room; credit growth and interest rates.

In the context of the recent storm No. 3, which has caused heavy damage to people and businesses, disrupted production and business, and greatly affected the macro-economy. Therefore, the Prime Minister hopes that banks will propose new policies to adapt to the situation; what solutions are needed for those affected by the storm and flood?

Banks need to propose solutions related to credit growth and reasonable interest rates in the spirit of harmonious benefits, shared risks, harmonious interests, "mutual love and affection", "national love and compatriotism" so that no one is left behind. In times of national difficulty, banks need to share, especially interest rates, to support people and businesses.

In the spirit of the 10th Central Conference of the 13th tenure with the determination to promote three strategic breakthroughs, decentralization, local decision, local action, local responsibility, he requested the determination to eliminate cumbersome administrative procedures, encourage innovation, dare to think, dare to do, dare to take responsibility.

The State Bank of Vietnam said that in its policy management, it has stabilized operating interest rates, strived to reduce lending interest rates, banks have reduced costs, strongly transformed digitally, and publicized average lending interest rates for businesses and people to access. In particular, the average lending interest rate for new and old loans continues to decrease sharply, reaching 8.18%/year by August 2024, down more than 1%/year compared to the end of 2023.

Private banks' credit growth potential is still large.

Of which, the average lending interest rate of the private banking group is at 9.17%/year, down about 0.96%/year. The State Bank assessed that although the downward trend continues, the average lending interest rate of the private banking group is still higher than the average of the whole system (8.18%/year) and the group of state-owned commercial banks (6.79%/year).

Flexible and appropriate exchange rate management, absorbing external shocks. The USD/VND exchange rate tends to decrease thanks to positive market sentiment, improved balance of domestic foreign currency supply and demand, and the economy's legitimate foreign currency needs are fully and promptly met. The depreciation of VND is consistent with the general trend, at an average and stable level compared to currencies in the region and the world.

By September 17, system-wide credit increased by 7.38% compared to the end of 2023 (higher than the 5.73% of the same period in 2023). Banks still have a lot of room for credit growth to provide capital for the economy; in which the private banking group mostly used less than 70% of the assigned target.

Credit growth across the system improved, reaching over VND 14.5 million billion, up 7.38% compared to the end of 2023. Credit growth for all industries improved, credit structure in line with the economic restructuring orientation.

Of which, credit for the trade and service sector accounts for the highest proportion, followed by industry and construction and agriculture, forestry and fisheries. For the private banking sector, about 50% of outstanding loans are for the trade and service sector.

Total assets of 28 joint stock commercial banks as of June 30 reached 9.3 million billion VND, accounting for 45% of the market share, of which 22 banks had assets of over 100,000 billion VND. Total mobilized capital of joint stock commercial banks reached 8.7 million billion VND, up 5.44% and accounting for 46.1% of the market share. The business results of joint stock commercial banks were quite good...

However, the operations of commercial banks also face difficulties and limitations related to bad debts and potential debts becoming bad debts, the credit absorption capacity of businesses and people is low, many businesses are reducing or stopping production, and pressure on bank credit continues to increase.

Source: https://tuoitre.vn/tang-truong-tin-dung-dat-14-5-trieu-ti-dong-nhung-van-con-nhieu-du-dia-cap-von-20240921155013532.htm