Central bank okays higher credit growth targets for lenders
Central bank okays higher credit growth targets for lenders
The State Bank of Vietnam (SBV), or the country's central bank has just raised credit growth targets for several banks in a move to pump more funds into the economy, with some enjoying a sharp increase of ten percentage points to 27% from the previous 17%.
Early this year, the central bank set credit growth rates of 17%, 15%, 13% and 8% for four groups of banks depending on their performance in the previous year.
TienPhongBank said the central bank in Dispatch No. 4879/NHNN-CSTT issued on August 6 agreed to lift its credit growth rate to 27%. This means total loan balances of the lender including the amount invested in corporate bonds as of the end of this year will be scaled up to a maximum level of 27% compared to end-2011.
The decision of the central bank is based on the lending performance of TienPhongBank in the year’s first half, with its credit disbursement soaring 6.8% in the second quarter alone.
OceanBank on Monday also announced the new credit growth target of 27% versus late 2011. As of the end of last month, total outstanding loans of the bank reached 30.169 trillion dong, up 16.7% year-on-year.
Military Bank, or MB, also obtained the permission from the monetary authority to revise its credit growth target up to 27% against the previous year.
It is likely that Bank for Agriculture and Rural Development, or Agribank, will also get the green light soon to raise the credit growth rate for this year given its strong lending activity in the year to date.
At the seminar ‘Connecting banks and enterprises to remove difficulties and boost production and business operations” in Ca Mau last Tuesday, Tran Quoc Khoi, director of Agribank’s branch in Ca Mau, said total outstanding loans of his branch in Jan-Jun picked up 2.5% over the year’s beginning. Total lending balances of the Thanh Hoa Branch of the lender in the same period was 35.48 trillion dong, a rise of 4.9% compared to early this year.
Well-informed sources told that the central bank in the next few days will continue widening credit rooms for a number of other commercial banks. It is noted that a handful of commercial banks and 100% foreign-invested lenders had sent petitions to the central banks for higher credit growth adjustments.
The central bank early this year put the year’s credit growth target of the whole banking system at 8-10% and then lowered the figure to 6-8% due to economic difficulties in the country. However, the total amount of credits system-wide in the year’s first half rose by less than 1%, sources said.
Industry insiders expect the revised credit growth targets will help them improve profits of 2012 as a whole. Low credit growth over the past months had cut inroads into many banks’ profits.
Vietbiz24
