The State Bank of Vietnam–HCM City Branch said that recently, the interbank domestic currency market in HCM City is continually growing very strongly leading to a strong increase in the capital transaction scope, which has boosted the rotation speed of capital and contributed to the stabilisation of the interest rate in the city in particular and nationwide in general.
Regarding the deposit market, by the end of September, total outstanding deposits of commercial banks and credit institutions in HCM City are estimated at 138.584 trillion dong equivalent, an increase of 20.96% against the end of 2003 and up 27.41% compared with the same period last year. Of the total, deposits in foreign currencies especially the US dollar increases 27.35% against the figure of 17.91% of the dong. Total outstanding deposits in dong-converted foreign currencies reached 47.119 trillion dong, accounting for 34% of total deposits in HCM City.
Particularly, medium and long-term deposits via T-bills and bond issues increased to 36.53%, considered the highest. According to banks, this is a positive trend because the medium and long-term deposit source can meet medium and long-term loan demands of businesses.
Regarding the lending market, by the end of September, total outstanding loans of the whole commercial bank system in HCM City is estimated at only 124.552 trillion dong, up 23.31% against the end of 2003 and up 32.65% compared with the same period 2003, of which loans in foreign currencies especially US dollars increased to highs of 32.14% against the end of 2003, accounting for 35% of total outstanding loans.
Thus, the outstanding lending balance increased higher than the deposit growth, which creates a light pressure on increasing the bank interest rate and causes a shortage in capital to disburse to businesses by the HCM City commercial bank system. Therefore, other capital sources from Hanoi and some other localities are being transferred to the city. This shows that the capital demand for development investment in HCM City is getting very high.
In addition, although outstanding small and medium deposits only account for 20% of total deposits, outstanding medium and long-term loans makes up 39% of total outstanding loans, which forces commercial banks to switch from funding short-term loans to medium and long term loans to businesses. This also shows that the demand for medium and long-term loans to be used for renewing machinery, equipment, and technologies of businesses is very high.
Commercial banks and credit institutions also are following economic programmes of the city to lend. Up to now, the outstanding loans disbursed on these programmes has reached 940 billion dong, up 19.44% against the start of 2004, of which banks and credit institutions directly lent to 93 projects. It is noteworthy that total outstanding loans disbursed to industrial parks and export processing zones have reached 10.72 trillion dong, up 30.14% compared with the beginning this year. According to banks, now IPs and EPZs are considered key and potential credit clients of city banks.
Credits to key agriculture and rural development programmes by banks reached 4.21 trillion dong, up 19.7% against the start of 2004.
Regarding the forex market, total foreign currencies especially US dollars bought by commercial banks in HCM City in the third quarter 2004 alone increased 46.69% against the same period last year. Total foreign currencies sold by banks in the third quarter 2004 increased 43.67% and in the first three quarters foreign currencies sold by banks have reached US$9.449 billion. Also in the first nine months this year, total trade payments via banks have reached US$6.532 billion, total export payments via banks reached US$4.596 billion. In the first nine months, total inward remittances by overseas Vietnamese or Viet Kieu has reached US$1.355 billion chiefly via banks, accounting for 60%.
The SVB-HCM City branch predicts that in the last months this year, although capital demand and banking services of all economic sectors in HCM City will likely be very high, the HCM City banking system is capable of meeting demand due to the capital sources transferred from bank branches in other localities.