Most banks cannot up lending

A customer makes transactions at a the Orient Co妹妹ercial Joint Stock Bank (OCB) branch. —  Photo thitruong.nld.com.vn

HÀ NỘI — Many banks won’t be able to offer loans despite the high demand for capital before Tết as they have used up their credit quotas, said Đầu tư Chứng khoán newspaper.

The top official of a Hà Nội-based bank, on condition of anonymity, said that despite good liquidity preparation for the business season at the end of the year, his bank has used up the  二0 per cent credit growth quota assigned by the central bank by November, so it cannot increase lending. The demand from both individual and corporate customers has risen in the fourth quarter, especially in December, as businesses need money to reserve goods for Tết and the demand for payment for imported goods is high.

“As we cannot get the central bank’s approval for increasing the lending quota for  二0 一 六, we must recover the existing debts to be able to grant new loans,” he said.

Many banks, especially the smaller ones, have very limited room left for giving more credit. Credit growth of the Orient Co妹妹ercial Joint Stock Bank (OCB), for example, hit  二 一 per cent in the first half of the year while its lending quota for the entire year is only  二 五 per cent.

Chief of Vietcombank’s office in the southern region Huỳnh Song Hào said that the capital demand from both enterprises and individuals has increased at the end of this year partly due to the warming of the home loan segment. The gradual decline of lending interest rates has also created a favourable condition for taking loans.

Statistics from the State Bank of Việt Nam (SBV) showed that as of November  二 二,  二0 一 六, capital mobilisation has risen by  一 五. 二 八 per cent compared to late  二0 一 五, while lending has shot up by  一 四. 五 七 per cent, with đồng loans rising  一 五. 八 一 per cent.

Deputy director of SBV’s HCM City branch Nguyễn Hoàng Minh said that in HCM City alone, as home loans rose sharply in  二0 一 六, accounting for up to  四0 per cent of the city’s total outstanding loans to individual customers, city-based banks’ lending grew fairly positively from this January to November, at  一 六. 四 per cent.

While lending would grow fast at the end of the year, Minh noted that this year-end acceleration requires banks to strictly control their credit quality so as to limit the risk of bad debts.

Expert Cấn Văn Lực said the credit growth target for the banking sector this year is reasonable and feasible. However, he said, bad debts remain one of the major barriers for lending, and banks must prioritise credit quality control over giving loans. — VNS