Vietnam c.bank says credits in HCM City bounce back

Aug 20th at 13:15

20-08-2012 13:15:49+07:00

Credits in HCM City have vigorously bounced back over the past three months owing to monetary easing, a situation described by an official of the central bank’s HCM City branch as favorable for the city to achieve the credit growth goal.

Nguyen Hoang Minh, deputy director of the central bank branch, said at a credit contracts signing ceremony on Thursday that lending as of this Wednesday had risen 1.5% against the end of 2011.

In the first five months, bank lending in the city contracted and credit growth was a mere 0.3% at end-June. By the end of July, credits had increased 0.86% before almost doubling to 1.5% two weeks later, Minh said.

Minh attributed the considerable credit growth to lower lending rates and better capital absorption on the part of enterprises.

Banks in the city have restructured or rescheduled debts totaling 46 trillion dong, or some US$2.25 billion, to enterprises, and disbursed an additional 118 trillion dong to help borrowers restructure their own debts.

Most banks have lowered their lending rates below 15% as requested by the central bank, Minh noted. He said over three quarters of outstanding loans in the city now had lending rates under 15%, and there are four banks that have cut lending rates across the board to less than 15%, namely Vietcombank, Agribank, BIDV and VietinBank.

Most loans that are still subject to lending rates higher than 15% are bad debts, consumer credits and loans to high-risk sectors like real estate and securities.

At the credit contracts signing event on last Thursday, banks in the city agreed to lend 122.4 billion dong to small and medium enterprises (SME) in the city’s Go Vap District, with the lending rates at between 12% and 13% a year. The lenders include Agribank, DongA Bank, Sacombank and VietinBank.

The credits given to SMEs are under a bank-enterprise connection program initiated by the HCM City government and the city branch of the central bank. Earlier, this credit program had been deployed in Tan Binh District, and the next beneficiaries will be SMEs in the outlying district of Can Gio.

Minh of the central bank said the bank-enterprise connection program would help achieve the credit growth target of 8-10% this year.

Pham Hong Phuc, director of the Go Vap branch of DongA Bank, said at the signing ceremony that most loans at his branch carry an annual interest rate of 14%, and over 90% of total outstanding loans at his bank have lending rates below 15%.

Many clients have repaid old loans at the branch and asked for new loans to enjoy a lower interest rate, he said.