Credit growth may reach 7.26pct in mid-November and 10pct by the end of 2020

24-Nov-2020 Intellasia | Dau tu Chung khoan | 6:02 AM Print This Post

According to the State Bank of Vietnam (SBV), as of November 17, 2020, the whole economy’s credit outstanding reached more than 8.79 quadrillion dong, increasing by 7.26%, which was higher than the rise of 10.28 percent of the same period in 2019. In which credit in dong increased by 7.76%, foreign currency credit decreased by 0.69%.

Restructure the debt payment term at 109 billion dong for customers affected by storms and floods

Specifically, as of October 30, 2020, the credit balance for the agriculture, forestry, and fishery sectors was estimated to increase by 5.22 percent compared to December 31, 2019. The credit balance for industry and construction was estimated to increase by 5.81%. The commercial service credit balance was estimated to increase by 8.2%.

For credit in five priority areas, SBV said that credit for agricultural and rural development as of October 30, 2020, was estimated to increase by 6.5 percent compared to the end of 2019. The export sector was estimated to rise by about 10%. That of small and medium enterprises witness a 7.21 percent increase. For the supporting industry, there appeared a decrease of 3.83%. For the high-tech enterprise sector, it was estimated to decrease by 0.81%.

The news about the results of Covid-19 support under Circular No. 01/2020/TT-NHNN was also updated with the latest data by regulators. Accordingly, on November 9, 2020, credit institutions had rescheduled the debt repayment period for 272,183 customers with outstanding loans of 341.855 trillion dong.

Also, interest rates were exempted or reduced for 552,725 customers with outstanding loans of 931.018 trillion dong. At the same time, new loans at preferential interest rates with accumulated sales from January 23 till then reach 2.017761 quadrillion dong for 356,385 customers.

Notably, Vietnam Bank for Social Policies (VBSP), which was not subject to Circular No. 01/2020/TT-NHNN, had also extended the debt for 166,709 customers with a balance of 4.163 trillion dong and provided new loans for 1,834,877 customers with the amount of 66.773 trillion dong.

In particular, SBV had directed credit institutions to quickly review customers affected by floods in the Central and Central Highlands last October-November 2020. Accordingly, financial institutions urgently supported and removed difficulties in loans for those customers.

Specifically, as of November 15, 2020, credit institutions had restructured repayment terms for 1,360 customers with outstanding loans of nearly 109 billion dong. Simultaneously, interest rate exemption and reduction for 13,458 customers had the total outstanding loans at 6.941 trillion dong.

Besides, new loans to restore production for 2,545 customers with loan sales reached 774 billion dong. Significantly, VBSP was freezing debt for 2,087 customers with a debt balance of 85.93 billion dong and writing off debt for 23 customers with 470 million dong.

Retail lending showed promising signs of recovery

It was no coincidence that the regulators had obtained the above positive credit growth figure. The report on the banking industry’s business results in Q3/2020 had just announced the good joint-stock commercial banks’ credit growth.

Accordingly, about 153.3 trillion dong in Q3/2020, total credit increased by approximately 19 percent higher than the increase in Q2/2020. As a result, credit growth at the end of Q3 increased by 2.9 percent q-o-q and 7.5 percent y-o-y. State-owned commercial banks grew relatively modestly, rising by 1.1 percent quarter-on-quarter (q-o-q) and 3.4 percent year-on-year (y-o-y).

Saigon Securities Incorporation (SSI)’s report also stated an increase in credit disbursement speed of joint-stock commercial banks (up 5.3 percent q-o-q and 12.9 percent y-o-y). Corporate loans and corporate bonds still grew nicely, while retail lending showed signs of recovery like Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV), Military Commercial Joint Stock Bank (MBBank), and HCM City Development Joint Stock Commercial Bank (HDBank).

According to the financial statements of MBBank, the most prominent feature at the bank was the recovery of the retail lending segment, with a growth of 10.8 percent y-o-y or 9.6 percent q-o-q, which increased by 9.9 trillion dong. This mainly came from short-term personal business loans from the parent bank, rising by 8.5 trillion dong.

Meanwhile, outstanding loans of private enterprises at MBBank decreased by 5.3 percent q-o-q. With retail lending recovering, the average lending yield increased by nine percentage points q-o-q to 9.15%.

At BIDV, the bank’s loan balance increased by 6 trillion dong in Q3/2020, corresponding to an increase of 0.54 percent q-o-q and 2.9 percent y-o-y.

Personal loans were still the main driver of BIDV’s credit growth, up 5.8 percent YTD and accounting for 35.2 percent of total outstanding loans. Loans to small and medium enterprises also recovered quite strongly in Q3/2020 (+ 5.6 percent q-o-q) but still decreased by 1.1 percent compared to the beginning of the year and accounted for 27 percent of outstanding loans.

As for HDBank, credit increased by 3.5 percent q-o-q, thanks to outstanding loans to small and medium-sized enterprises (SME), large and substantial customers.

While SME customer debt balance drove the overall growth in the first six months of 2020 (up 16.8%), recovery from personal loans was the driving force for Q3/2020 (up 4.3 percent y-o-y at 2.6 trillion dong). Large enterprises’ outstanding loans also increased strongly by 38.7 percent q-o-q (2 trillion dong), as the bank could disburse to big customers such as EVN, THACO and other giants.

A senior leader of HDBank said that credit growth at the end of October 2020 had reached 20%, and the bank was asking to increase the credit growth limit to about 27 percent to 28 percent in the whole year 2020.

In fact, after loosening the credit growth limit for many joint-stock commercial banks, of which the highest level was 23 percent for Vietnam Technological and Commercial Joint-Stock Bank (Techcombank), Tien Phong Commercial Joint Stock Bank (TPBank), Vietnam International Commercial Joint Stock Bank (VIB), SBV had also granted credit room to some other banks.

SSI’s report estimated that credit growth in 2020 would reach 9 percent to 10 percent compared to the beginning of the year.

 

Category: Finance, Vietnam

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