Hanoi's credit growth surges in first seven months
Hanoi's credit growth surges in first seven months
Promising credit growth in Hanoi over the first seven months is expected to continue in the second half of the year as access to loans for individuals and businesses improving.
According to a report released by Hanoi Statistics Office on July 29, the total outstanding credit in Hanoi had reached $164.04 billion by the end of July, marking an increase of 1.12 per cent compared to the previous month and an 8.84 per cent increase from the end of 2023.
Of which, the short-term outstanding credit accounted for $70.08 billion, while the medium- and long-term outstanding credit amounted to $93.96 billion, rising 1.38 per cent and 0.93 per cent, respectively, compared to the beginning of the year.
“The focus on credit for production and business with preferential interest rates has proven effective. This is also the first year that the State Bank of Vietnam (SBV) has allocated a credit growth limit from the beginning of the year, allowing banks to proactively supply capital to the market with various incentives. With this change, businesses' access to credit this year will improve,” said Nguyen Thuy Hanh, deputy general director of Corporate and Investment Banking at Standard Chartered Vietnam.
As of the end of July, the non-performing loan (NPL) ratio among credit institutions in the city stood at 2.1 per cent of total outstanding loans. Credit institutions have focused on credit growth, offering numerous preferential credit and flexible interest rate packages.
Hanoi Statistics Office reported that loans under the city’s credit incentives included 14.5 per cent of total loans under a bank-business connection programme; 18.9 per cent to small- and medium-sized enterprises; 8.93 per cent to agricultural and rural programmes; 5.14 per cent to export loans; 2.32 per cent to supporting industries; 0.36 per cent to high-tech enterprises; and 0.43 per cent to social policy loans.
At the end of July, the total mobilised capital of credit institutions in the city was estimated at $226.50 billion, up 1.45 per cent from the previous month and 1.87 per cent from the end of 2023.
Deposits had reached $200.88 billion, increasing by 1.61 per cent from the previous month and 3.22 per cent from the end of 2023. Valuable papers amounted to $25.63 billion, up 0.18 per cent from the previous month but down 7.6 per cent from the end of 2023.
The SBV is continuing to encourage credit institutions to cut costs and implement policies to reduce lending interest rates, helping individuals and businesses to access bank credit.
The average lending interest rates at domestic commercial banks for both old and new loans with outstanding balances currently ranges from 7.3-9.5 per cent per year. The average short-term lending interest rate is approximately 3.6 per cent per year, as regulated by the SBV, for certain priority sectors such as agriculture, rural development, exports, small- and medium-sized enterprises, supporting industries, and high-tech enterprises.
