Credit will grow gradually towards the end of the year.

Slow growth

According to Tin Tuc Newspaper, Deputy Governor of the State Bank of Vietnam Dao Minh Tu said that in September and the first days of October alone, the positive credit growth rate reached more than 1%. The total outstanding debt of the whole economy reached about 13 million billion VND.

Although this growth rate is significantly slower than the same period in 2022 (11.05%) and previous years, the above figures reflect the recent trend of credit acceleration.

The Deputy Governor expects that in the last 3 months of the year, credit will increase rapidly according to practice. The Bank will implement drastic measures with the support of localities, creating conditions to remove difficulties for businesses to rise up in the difficult economic context.

In fact, banks have continuously implemented preferential credit packages, reducing lending interest rates for both new and existing customers to stimulate credit demand.

As at the Joint Stock Commercial Bank for Investment and Development of Vietnam ( BIDV ), in the first 9 months of 2023, there were 5 adjustments to reduce the lending interest rate floor, with a reduction of 1.2 - 1.6%/year and 28 preferential interest rate credit packages for customers were implemented, with a total scale of 610,000 billion VND, with an interest rate support level of up to 2.5%/year.

Similarly, Vietnam Prosperity Joint Stock Commercial Bank ( VPBank ) currently has 3 preferential loan packages being implemented with a total scale of up to 13,000 billion VND, interest rates from 5%/year; Nam A Commercial Joint Stock Bank (Nam A Bank) reduces lending interest rates for existing individual customers by up to 2.6%/year.

Speaking to Dau Tu Newspaper, Mr. Tu Tien Phat, General Director of ACB Bank, said that ACB's credit growth has a tendency to recover, reaching 7% by the end of August 2023 and is expected to reach the target of 12-14% for the whole year. It is forecasted that credit in the entire banking industry will accelerate further in the remaining months of 2023.

Credit growth at VIB Bank by the end of August 2023 reached 3%, an improvement compared to 0.9% at the end of June 2023. The bank's full-year credit growth is expected to be 10-12%, lower than the granted room of 14.25%.

In September and early October alone, positive credit growth reached more than 1%.

Mr. Nguyen Dinh Tung, General Director of OCB Bank, said that OCB's credit growth by the end of September 2023 reached 11%. The bank is gradually implementing the goal of achieving credit growth according to the limit granted by the State Bank of Vietnam at the beginning of this year.

Meanwhile, the leader of VietinBank said that VietinBank recorded positive credit growth compared to the general market level, reaching nearly 9%, but still far from the plan.

Year-end forecast

According to information on Dau Tu Newspaper, Mr. Nguyen Dinh Tung said that the capital demand of businesses in the retail sector is gradually returning, only the demand for capital for home loans is still low, because the real estate market is still quiet and transactions on the market are not active. Compared to the beginning of this year, the interest rate for home loans has decreased significantly, if including promotions, it is about 7-8%/year, otherwise it is about 10%/year - equal to the period before the Covid-19 pandemic.

“From now until the end of the year, interest rates will decrease further, but the decrease will not be as strong as in the previous months, because it has decreased deeply,” said Mr. Tung, adding that although credit growth is difficult, OCB will still increase capital mobilization to prepare well for liquidity to meet capital demand again at the end of the year, when the economic situation improves again and the market gradually becomes positive.

With an approved credit limit of 14.5% for this year, according to Mr. Tu Tien Phat, General Director of ACB, the bank will continue to focus on corporate customers, especially import-export and manufacturing enterprises by applying more attractive lending interest rates along with other service packages.

Mr. Phat said that besides mortgages, ACB is promoting unsecured loans, such as in the export sector to support businesses with markets that can be mortgaged with cash flow. Businesses can bring in cash flow, ACB manages the business's export cash flow. This is a form of cash flow mortgage loan, or in other words, it is both preferential and promotes credit growth in the last months of the year and the whole year ahead.

In addition, forecasting the interest rate trend in the last quarter of the year, Economic Expert Nguyen Tri Hieu commented that lending interest rates will hardly decrease as deeply as deposit interest rates because the safety of the entire system must be ensured. Therefore, the interest rate level from now until the end of the year will decrease by about 0.5 percentage points, but cannot decrease further.

Discussing with VNA about the problem of promoting credit growth while still ensuring the quality of loans, Ms. Hoang Anh said that the important issue now is to maintain reasonable interest rates so that good and relatively good businesses can access credit again, supporting production and business activities. As for businesses that are not yet stable, it will be necessary to restructure their financial foundation and support them to change their management methods and business plans, not just support them with capital.

Although lending interest rates are still decreasing slowly compared to deposit interest rates, many experts predict that credit growth will accelerate in the last months of the year.

"For each customer group, commercial banks will have different solutions to ensure debt quality. As with corporate customers, in parallel with lowering interest rates, banks also help improve financial capacity and ensure debt repayment ability. As for individual customers, banks apply a comprehensive financial strategy and personal financial education to help them use loan capital effectively, balance savings and spending, thereby ensuring the best cash flow to repay the bank," Ms. Hoang Anh shared.

Although lending interest rates are still decreasing slowly compared to deposit interest rates, many experts predict that credit growth will accelerate in the last months of the year. Because when markets recover, business production activities of enterprises accelerate again, disruptions in the supply chain are overcome, the real estate market gradually warms up... demand for credit will inevitably increase.

Deputy Governor Dao Minh Tu added that the State Bank will continue to operate monetary policy to ensure stability. In particular, exchange rate tools, ensuring stability, interest rates are operated in a stable and gradually decreasing direction, in line with inflation developments and economic growth, not allowing speculation to hold and raise exchange rates, using resources, ensuring continued operation of exchange rates; Continuing to operate interest rates in a gradually decreasing direction, the State Bank directs commercial banks to save costs, using all resources to share difficulties in reducing interest rates for businesses.

At the same time, the State Bank focuses on removing conditions and procedures for accessing credit. However, according to the Deputy Governor, this issue has two sides. If the minimum regulations in credit conditions are not ensured, it can lead to unsafe and unhealthy credit institutions and national financial safety. Therefore, the State Bank's viewpoint is to ensure the harmony of capital safety while creating favorable conditions for credit expansion.

Huong Anh (t/h)

Source: https://www.nguoiduatin.vn/tin-dung-se-tang-truong-dan-ve-cuoi-nam-a630963.html