Vietnam’s Bank Credit Keeps Growing Fast: Commission

Tuan Minh

17:15 05/09/2017

BizLIVE - Despite rapid credit growth, banks have much room left to pump cash into the economy in the rest of this year.

Vietnam’s Bank Credit Keeps Growing Fast: Commission

Credit has outpaced mobilization in the Vietnamese banking system, raising fears of liquidity stress. Photo: Internet

Vietnam’s total outstanding loans grew 11.5% in the first eight months of this year, faster than an expansion of 10.2% in the same period last year, the National Financial Supervisory Commission has said in a report.
Of total credit, dong-denominated loans accounted for 91.5% while loans in foreign currencies made up 8.5%.
The commission noted that lending in foreign currencies expanded 11.5% in the eight-month period, much faster than an expansion of 1.7% in the same period last year, compared to an 11% growth rate of lending in the Vietnamese dong.
As much as 31.2% of total credit was funneled into manufacturing and construction while 37.4% of the loans ran into services, the commission added.
According to the report, the growth of capital mobilization was much slower than that of credit when increasing 9.1% between January and August. Of the sum, deposits from clients went up 8.7% in from end-2016.
Notably, deposits from the State Treasury of Vietnam grew 68% from the start of this year to around 160 trillion dong ($7 billion) at the end of August, it added.
The commission pointed out that system liquidity was profuse, evidenced by interbank interest rates remaining low and edging up 0.2-0.3 percentage points from end-July.
In addition, the State Bank of Vietnam net withdrew 4.5 trillion dong ($198 million) between August 1 and 22, leading to a net withdrawal of 32.63 trillion dong ($1.43 trillion) since the start of this year.
The government has revised up its credit growth target to 21-22% this year, compared to the initial figure of 18%.