SBV to prioritise credit for production, business in HCM City

Feb 16th at 10:40
16-02-2023 10:40:33+07:00

SBV to prioritise credit for production, business in HCM City

The State Bank of Viet Nam’s (SBV) HCM City branch will continue to prioritise credit for production and business, especially in priority sectors, to boost economic recovery.

 

Nguyen Duc Lenh, deputy director of the SBV’s HCM City branch, said the credit flow would be directed to priority sectors while credit quality would also be improved.

Priority fields include agriculture, rural areas, exports, small and medium-sized enterprises, supporting industries, high-tech enterprises, and others.

Credit institutions must also ensure stable liquidity, safe banking operations, and strictly control credit from potentially risky areas, according to Lenh.

Credit growth in the city has focused on production and business to support economic recovery, accounting for 60-70 per cent of the total outstanding loans, said Lenh.

Last December, the SBV lifted the credit growth target by 1.5-2 percentage points for 2022 from its earlier target of 14 per cent, allowing lenders to lend an additional VND240 trillion (US$9.7 billion).

Interest rates remain high

Economist Le Xuan Nghia, a member of the National Financial and Monetary Policy Advisory Council, said interest rates are still too high, despite the central bank calling on banks to cut lending rates to support enterprises.

Deposit interest rates at banks have surged to as much as 12 per cent per year, pushing lending interest rates up to 15-16 per cent a year, he said.

If the inflation rate is around 4 per cent, the savings interest rates should be around 6-7 per cent per year, he added.

Experts have predicted the deposit interest rate will remain high at least until June and that deposit rates would peak in the first half of 2023 with an increase of 1-1.5 percentage points.

Recently, the Viet Nam Banks Association called on commercial banks to keep deposit interest rates at 9.5 per cent or below to reduce lending interest rates.

Commercial banks started lowering deposit interest rates early this month and cut further last week, raising hope of a drop in lending rates.

SBV Governor Nguyen Thi Hong has constantly called on banks to cut operating costs and improve administrative procedures so as to reduce lending interest rates.

Expert Can Van Luc said enterprises should look to other capital mobilisation channels instead of relying too much on bank loans. 

bizhub



RELATED STOCK CODE (2)

NEWS SAME CATEGORY

MB pioneers cutting 1 per cent from lending interest rates for corporate clients

In this challenging economic climate, Vietnamese businesses are concerned over rising interest rates, which could hamper their cash flow and profits. In response...

Building confidence and trust with credit rating agencies

The adequacy of credit ratings is crucial for debt markets everywhere else in the world, including emerging economies like Vietnam. Michael Goh, an international...

Standard Chartered supports stronger Vietnam-Singapore economic relations

Standard Chartered Bank was proud to be a supporting partner of the “Vietnam – Singapore Business Forum 2023”, organised by the Embassy of Vietnam in Singapore in...

A remarkable first-year journey for Shinhan Life in Vietnam

During its one-year presence in Vietnam, Shinhan Life – a life insurance company from South Korea – has had an impressive journey to successfully surpass its set...

SBV works to mitigate potential risks for non-banking credit institutions

The State Bank of Viet Nam (SBV) is collecting comments on its draft circular to minimise potential risks for non-banking credit institutions and ensure they work...

Banks suffered big losses from securities trading in 2022

Many banks reported negative results in securities trading and investment in 2022 due to the interest rate hike, the exchange rate uncertainty, the sharp decline of...

Viet Nam to amend law on personal income tax

It is pressing for Viet Nam to amend the Law on Personal Income Tax (PIT) as many of its regulations have proven to be outdated and no longer appropriate.

Banks urged to reduce costs to cope with NIM drops

To ensure net interest margin (NIM), banks are often choosing to raise output interest rates for borrowers but reduce the ability to fulfill debt obligations, while...

Banks bolster financial strength via M&As and capital hikes

Since the start of the year, several banks have been busy with mergers and acquisitions (M&A) and capital hike ventures to bolster financial health and keep up with...

Rising bad debt threat looms large

Despite a bright business outlook, non-performing loans are causing significant concerns to banks amid a challenging environment in both the domestic and global...

Bank stocks

Insurance stocks


MOST READ


Back To Top