BizLIVE - Banks in Vietnam has quite large room to provide loans to the securities sector.
Banks in Vietnam Have Room to Lend $660 Million for Securities Trading
A man watches an electronic board in an unidentified securities company. Photo: VnEconomy
Banks in Vietnam are eligible to provide an additional over 15 trillion dong ($660.8 million) to securities companies and traders, Governor of the State Bank of Vietnam (SBV) Le Minh Hung said last week.
Total outstanding loans at banks for the securities industry are estimated at 10 trillion dong ($440 million) presently, down 40% from the end of 2016, Hung said at a National Assembly Q&A session.
Under Vietnamese legislation, banks having a bad debt ratio of below 3% are permitted to provide loans for securities trading, with the amount of less than 5% of their registered capital.
With banks in the country having a combined registered capital of 505.26 trillion dong ($22.26 billion) as of August, they are entitled to lend over 25 trillion dong for this sector, meaning that they can lend another 15 trillion dong.
The benchmark VN Index of the Hochiminh Stock Exchange has risen over 30% this year, partly driven by foreign inflows. In the year to last week, overseas traders net bought a total of 22.46 trillion dong ($989 million) worth of Vietnamese shares.