Bank loans to real estate business rise in H1 2023
Bank loans to real estate business rise in H1 2023
Outstanding loans to the real estate sector in the first half of 2023 surged by 17.4 per cent, exceeding the 10.7 per cent growth rate of the whole of 2022, according to data from the State Bank of Việt Nam (SBV).
A customer borrows at a SHB’s transaction office in Hà Nội. Outstanding loans for real estate of SHB in H1 2023 increased by 88.8 per cent compared to the beginning of the year. — VNA/VNS Photo |
Data of 17 listed banks showed their total outstanding loans for the real estate sector in the first half of 2023 reached VNĐ426 trillion, up 36.2 per cent compared to the end of last year. The proportion of the banks’ loans in this sector also increased from 8 per cent at the end of 2022 to 10 per cent at the end of the second quarter of 2023.
The rise showed banks were still continuing to inject capital into the real estate sector even though the real estate market had not improved much.
According to the data, 14 out of the 17 banks recorded an increase in outstanding loans for real estate compared to the beginning of the year.
The highest growth rate belonged to SHB with a rise from more than VNĐ31 trillion to VNĐ59 trillion, equivalent to an increase of 88.8 per cent.
HDBank and Sacombank also recorded rapid growth of outstanding loans for real estate, reaching about 56 per cent each.
Meanwhile, outstanding loans for real estate businesses at many banks, such as LPBank, PG Bank and VIB, recorded a sharp decrease of 49.1 per cent, 34.5 per cent and 14.8 per cent compared to the beginning of the year, respectively.
At Techcombank, which was the leader in real estate lending, the proportion of loans in the fields of real estate, construction and construction materials accounted for about 70 per cent of the bank's outstanding loans.
In meetings with firms, representatives of the State Bank of Vietnam (SBV) has repeatedly affirmed that the central bank would not tighten real estate lending. In the current context of slow credit growth, banks are increasingly focusing on easing access to capital for firms, including those in real estate.
Most recently, after recommendations from firms and the HCM City Real Estate Association, the SBV adjusted Circular 06, suspending the implementation of three provisions that have a significant impact on the real estate market.
According to the ACB Securities Company (ACBS), the suspension of the provisions will support real estate firms to restructure.
In addition, banks also have a legal corridor to be able to lend to real estate buyers who have not yet met the business conditions (sales licence), but have qualified for legal conditions.
The suspension will also assist real estate firms in borrowing for investment, an increase of land area or investment in a new project. Most real estate firms can benefit from this circular.
ACB’s analysts also believe that the suspension will contribute to supporting credit growth, which has been at a low level recently. The credit at the end of July increased by only 4.56 per cent compared to the beginning of the year, and decreased by 0.17 per cent compared to the end of June.
