Banks eye ways to convert deposit boom into lending

Jul 14th at 14:09
14-07-2014 14:09:16+07:00

Banks eye ways to convert deposit boom into lending

Commercial banks are seeking ways to boost lending as bank deposits have increased in the past few months.

By the end of June, Viet Nam's credit growth in the first half of this year surged only 3.52 per cent compared to last December, the State Bank of Viet Nam reported.

HCM City-based commercial banks have launched several preferential credit programmes to boost their lending.

NamA Bank Deputy General Director Tran Ngoc Tam said his bank could not wait for businesses to ask for loans and had to find ways to boost lending by any means possible. The bank employees have to get access to potential borrowers and offer them suitable loan packages, reports Tuoi Tre (Youth) online.

An executive at the Sacombank acknowledged that apart from boosting lending for large-scale businesses, his bank also sought individual borrowers and small and medium-d businesses. The businesses still wanted to maintain their production despite the difficult economic circumstances.

Sacombank has launched many credit programmes for small and medium-d enterprises with a VND1 billion maximum loan package. Loan application procedure will be processed within two days.

By the end of June, the individual loan packages of Sacombank rose 13 per cent over the same period last year, he said.

A deputy general director at a commercial bank in HCM City District 1, who asked not to be identified, said his bank staffers have to get business in any way possible. For individuals, the bank has to approach borrowers through State offices, schools or buy information from shopping centres and insurance companies.

He said those who visit shopping centres are often high-income earners, thus making it easier for the bank to offer them services.

According to economist Nguyen Tri Hieu, household businesses and individual borrowers are those who are able to absorb loans in the current economic circumstances.

On the other hand, due to small loans, banks can avoid the risks of bad debts. Commercial banks get high lending interest rates from them as compared to lending interest rates offered to businesses.

He said businesses are still facing difficulty gaining access to cheap bank loans due to their "poor health" on account of bad debts and no assets to mortgage. Also, the banks do not want to face high ratio of bad debt lending.

A survey carried out by Vietnam Business Association found that 27 per cent of businesses cannot take bank loans due to incomplete lending application procedures while 8 per cent do not want loans. The remaining businesses are not qualified due to their existing bad debts and no assets to mortgage.

Economist Le Xuan Nghia said the most difficult thing now is that banks do not believe in businesses and want to insulate themselves from high risks.

Nghia noted that if this situation prevailed it would make an adverse impact on the country's economic recovery.

Nghia also attributed the low credit growth over the months to the sluggish recovery of bad debts in commercial banks. If no breakthrough was made to handle the bad debt issue soon, the credit growth would remain low, he added.

bizhub



NEWS SAME CATEGORY

State Bank to crack down on bitcoin exchange

The State Bank of Viet Nam will work with the public security forces to seize operators of the Viet Nam real-time bitcoin exchange (VBTC) that was launched on...

Banks achieve half their annual profit targets

Several banks have posted satisfactory profits, achieving around half of the annual targets, during the first half of this year, the Sai Gon Dau Tu (Sai Gon...

Central bank assuages foreign currency lending fears

Increasing foreign currency lending does not present a risk to the Vietnamese economy, said Nguyen Thi Hong, director of the Monetary Policy Department under the...

Businesses rush to buy dollars, betting on carry-trade deals

In its report released on July 2, the Vietnam National Finance Supervision Council highlighted the sharp increase in outstanding loans in foreign currency, warning...

Forex rate falls in commercial banks

The US dollar prices in commercial banks fell sharply on July 10 after the State Bank of Viet Nam announced that the domestic currency market was still stable.

HDBank offers preferential interest rates

The HCM City Development Bank (HDBank) is offering preferential interest rates for business households and individuals nationwide, who borrow money between now and...

An Binh Bank to launch lending package

An Binh Bank will launch a VND1trillion (US$46 million) lending package on July 14 to finance production and consumers.

SBV Governor plans flexible monetary policy for H2

State Bank of Viet Nam's Governor Nguyen Van Binh is planning a more flexible monetary policy in the second half of this year to achieve credit growth of 12 to 14...

Weak domestic demand slows down economic growth: report

Viet Nam's gross domestic product (GDP) is on a slow and steady path to recovery amid weak domestic demand, ANZ Bank states in a report dated July 8.

Experts scrutinise slow pace of bad debt resolution

Banking experts are looking at ways to more effectively tackle the country’s bad debt situation.

Bank stocks

Insurance stocks


MOST READ


Back To Top