Higher credit growth expected for remaining months

The banks will create the most favorable conditions for people and businesses to access credit - photo: TCB

Credit began to increase sharply

According to the latest data from the State Bank of Vietnam (SBV), credit increased sharply in the last week of September with nearly VND120 trillion (one percent of the total outstanding loans) pumped into the economy, taking the total to about VND12.7 quadrillion in the first nine months of this year, up 6.9 percent from early 2023 and higher than the State Bank's forecast (6.1-6.2 percent).

According to SBV leaders, credit growth began to show signs of improvement but was still lower than the same period last year and it only reached half of the 2023 target (14 percent) by the end of the third quarter. The banks have gradually cut lending interest rates by 1-3 percent for enterprise borrowers and 1-2.5 percent for individual customers compared to early this year to stimulate credit demand during the peak business season in the remaining months of the year.

Tu Tien Phat, General Director of Asia Commercial Joint Stock Bank (ACB), said ACB's credit growth has tended to recover, reaching seven percent by the end of August and is expected to reach the 12-14 percent growth target. Phat forecasts that the banking sector’s credit growth will accelerate in the remaining months of 2023.

The Vietnam International Commercial Joint Stock Bank (VIB) reached a credit growth of three percent by the end of August, 2.1 percent higher than the 0.9 percent growth it reached at the end of June. VIB is expected to reach a credit growth of 10-12 percent in 2023, lower than the assigned target – 14.25 percent.

Nguyen Dinh Tung, General Director of Oriental Commercial Joint Stock Bank (OCB), said his bank saw a credit growth of 11 percent by the end of September and is endeavoring to reach the credit room allocated by the State Bank earlier this year.

According to Nguyen Thi Quynh Giao, Deputy General Director of the Bank for Investment and Development of Vietnam (BIDV), her bank's credit growth was seven percent in the first nine months of 2023 (as of September 26), higher than the banking sector’s average.

Expectations for corporate customers

The capital demand of retail businesses has gradually recovered, while the demand for capital for real estate loans remains low, as the property market is still quiet. The interest rates are expected to further decrease but not as strongly as in the previous few months, because they have dropped sharply, Tung said. Although credit is difficult to increase, OCB will still strengthen capital mobilization to meet the growing capital demand in the remaining months of the year.

Assigned a credit growth of 14.5 percent in 2023, ACB will continue to focus on corporate customers, especially import-export and manufacturing enterprises. The bank will offer more attractive loan interest rates associated with other service packages. Besides mortgages, ACB is promoting unsecured loans such as those for exporters to make it possible for businesses with markets to mortgage with cash flows.

According to an SBV survey, credit institutions believe that the banking sector’s outstanding loan balance will increase by 4.6 percent in the fourth quarter and 12.3 percent in the whole year. This is 0.2 percent lower than the third quarter of 2023, as well as lower than the target set by the State Bank early this year, similar to the estimates of the majority of experts and securities companies.

Deputy Governor of the State Bank of Vietnam, Dao Minh Tu said the State Bank will continue to operate a stable monetary policy, including the maintenance of stable exchange rates in accordance with inflation developments and economic growth, gradual reduction of interest rates, and decrease of the commercial banks’ costs.

Hoang Lan