Banks pumps nearly VND127 trillion into the market in November

08-Dec-2021 Intellasia | Zing News | 5:02 AM Print This Post

This is the figure summarised by the Research centre of Saigon Securities Incorporation (SSI Research) from market data in the capital market in the week from November 29th to December 3rd.

Specifically, in the first week of December, the State Bank of Vietnam (SBV) stopped the injection of capital into the system of commercial banks through the foreign currency spot buying channel. Meanwhile, the Open Market Operations (OMO) channel was not resumed by the monetary authority.

However, thanks to the large amount of dong injected into the market in the previous weeks, the liquidity of the banking system remained abundant, helping the interbank interest rate level stay at low levels.

By the end of last week, the interbank interest rates were 0.63 percent per annum on overnight term, down by 0.01 percentage point compared to the previous week; and 0.74 percent per annum on one-week term, up by .01 percentage point.

Considering the weekly chart, the above overnight interbank rate was the lowest rate in April. This development shows that the liquidity of the banking system is still in an abundant state when the credit of the entire industry has been negatively affected by the 4th Covid-19 epidemic.

However, according to the latest update from the SBV, the credit growth as of November 25th reached 10.1 percent year-on-year, much higher than the 8.4 percent growth in 2020.

Thus, in November alone, commercial banks provided about 126.6 trillion dong of loans to the market, equivalent to a net injection of 4.2 trillion dong per day.

Compared to October 2021, the amount of capital net injected into the market through this lending channel has nearly doubled. Compared to August and September 2021, the lending to the market in November has increased by nearly threefold.

According to the analysts of SSI Research, the good credit growth is a signal showing the positive economic recovery after the pandemic, along with the improvement of the November’s macro data.

In addition, the reason for the sharp increase in credit in the past month is the interest rate support package in HCM City which has been promoted since October with the aim of supporting the economy.

“The economy seems to have overcome the most difficult period of the pandemic and the credit growth this year will be about 13%, in line with the recent move to increase the credit growth limits in some commercial banks of the SBV in the recent time,” said SSI Research.

Specifically, in the last week of November, the monetary authority approved to increase the credit growth room in 2021for some banks by one to six percentage points. In which, four banks were assigned new limits of over 20%, including Tien Phong Commercial Joint Stock Bank (TPBank), Vietnam Technological and Commercial Joint Stock Bank (Techcombank), Maritime Commercial Joint Stock Bank (MSB) and Military Commercial Joint Stock Bank (MBBank).

Specifically, TPBank received the highest credit growth limit of 23.4 percent for the whole year, up by six percentage points compared to the initial target. Similarly, the new credit growth limits in Techcombank, MSB and MBBank are respectively 22.1%, 22 percent and 21%, up by five to six percentage points.

In addition, many other banks have been granted higher credit growth limits in this period, such as Vietnam International Commercial Joint Stock Bank (VIB, 19.1%), Vietnam Prosperity Commercial Joint Stock Bank (VPBank, 17.1%), Commercial Joint Stock Bank for Foreign Trade of Vietnam (Vietcombank, 15%), Orient Commercial Joint Stock Bank (PCB, 15%), Asia Commercial Joint Stock Bank (ACB, 13.1%), Commercial Joint Stock Bank for Industry and Trade of Vietnam (VietinBank, 12.5%), Commercial Joint Stock Bank for Investment and Development of Vietnam (BIDV, 12%), etc.

Notably, from the beginning of December, the Ministry of Finance tends to monitor the corporate bond market more closely. Currently, two issuers and one securities company have been sanctioned for violating the issuance principles. The more tightly regulated bond market will be the driving force for banks’ credit growth.

 

Category: Finance, Vietnam

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