Bank credit limit extension can lead to the market suspicion

08-Aug-2019 Intellasia | VnEconomy | 6:02 AM Print This Post

Previously, as reported, according to VnEconomy statistics on 25 joint-stock commercial banks in the first six months, many banks had a strong growth of loans.

Specifically, nine out of 25 banks have a high growth of outstanding loans to customers over 10 percent within six months.

According to the orientation of the State Bank of Vietnam (SBV), the credit growth target of the whole sector in 2019 is at 14 percent. This means that, to meet the threshold that SBV assigns to each bank, or banks must hold back credit in the second half of the year or be approved to extend the target. Credit growth has been delivered. Many banks did not conceal the expectation of loosening room for credit to be higher due to the completion of Basel II.

According to many analysts’ comments, although SBV will loosen credit targets for some units, it will not be much to affect the credit growth target of the whole industry.

Recently, quite a few banks have revealed that being allowed to open more credit rooms like Vietnam Prosperity Joint-Stock Commercial Bank (VPBank) has been approved to increase credit growth target from 12 percent to 16 percent; Vietnam Technological and Commercial Joint-Stock Bank (Techcombank) also stated that it can extend credit limit from 13 percent to 17 percent; Military Commercial Joint Stock Bank (MBMBBank) was approved to increase credit target from 13 percent to 17 percent; Asia Commercial Joint Stock Bank (ACB) representatives shared that they could increase the lending limit from 13 percent to 17 percent and Sai Gon Thuong Tin Commercial Joint Stock Bank (Sacombank) leaders also disclosed the credit limit but did not mention specific figures.

Talking to VnEconomy, an economic expert said, with some banks growing at a negative or low level, for example, banks with zero dong, the increase of other banks will keep growth of the whole industry on the right track to the proposed targets. But for the needs of the market, the criteria for each bank will be allowed according to the SBV’s assessment.

“However, this mechanism is not fair,” said the expert. He said that information on credit indicators is not publicly announced by management agencies but they are self-investigating or disclosed by banks.

“Do not rank banks, do not claim which banks are assigned how much, how much is loosened, non-transparent information leading to the situation that the increase is not wrong and the decrease is also not wrong.” Of course, for the management agency, there must be reasons and bases, but for the market where there was no transparent information, it would obviously lead to suspicion, one thing should not be in operating policy, this expert said.


Category: Finance, Vietnam

Print This Post