Banks to tighten credit in risky sectors in remaining months of this year
Banks to tighten credit in risky sectors in remaining months of this year
Banks will continue to tighten lending in risky sectors including securities, real estate, financial, and tourism business, seeing higher credit risks in the remaining months of this year, a survey carried out by The Monetary Forecasting and Statistics Department, has said. 
The survey included 95 per cent of credit institutions and branches of foreign banks operating in Viet Nam.
The survey found that credit institutions saw an increase in overall credit demand in the first half of this year and forecast the trend would continue in the second half. Only credit demand from tourism businesses dropped in the first half but it was expected to see a slight recovery in the second half.
Credit risk was seen to increase in the first half of 2021 but at a lower rate than the second half of 2020 in almost all sectors. However, securities, real estate, financial and tourism businesses were considered sectors with higher credit risk in the pandemic.
Banks said that they intended to tighten lending for securities, real estate, financial and tourism business in the remaining months of this year but loosen credit criteria for enterprises, especially those of small and medium-sized enterprises, on positive economic prospects, improved financial capacity of credit institutions, and the Government’s drastic measures to fight the virus.
Retail and wholesale, import and export and lending for living expenses were the major drivers of credit growth in the first half of this year and would continue in the remaining months of this year and next.
State Bank of Viet Nam statistics showed that total outstanding loans were estimated to be more than VND9.6 quadrillion (US$414 billion) as of the end of May and banks pumped a net value of more than VND455 trillion into the economy through lending channels in the first five months of this year.
Trade and industry were the two sectors with the highest outstanding loans, worth more than VND2.22 quadrillion and VND1.84 quadrillion respectively.
Credit for trade saw a growth rate of 5.73 per cent while industry had a 6.73 per cent growth rate, higher than overall credit growth of 4.95 per cent in the first five months of this year.
