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Banks prepare capital to meet credit demands in 2022

Banks have been increasing the attraction of deposits to have enough capital for the credit needs of customers. Credit demand is expected to increase from the first quarter of this year.



This stands in contrast to the years before the pandemic, when credit in the first quarter often declined due to low capital demand.

This year, credit has increased from January. According to the State Bank of Vietnam (SBV), credit as of January 25, 2022 rose by 2.74 percent compared to the end of 2021. Compared with January of the past ten years, the rise was the highest rate. According to experts, the surge was a positive signal, showing the economy is recovering strongly and capital demand is increasing rapidly.

The SBV sets a credit growth target of about 14 percent for 2022, against 13.53 percent of 2021. According to the SBV, along with preferential interest rate credit packages given to the production and business sectors, credit growth will be more flexible this year to support economic recovery.

Nguyen Dinh Tung, OCB director, said the economy had been gradually recovering after the fourth wave of COVID-19 was controlled thanks to the high vaccine coverage rate. Therefore, credit had increased again since the last quarter of 2021 when firms needed capital to recover production and business activities.

With the Government’s plans to introduce stimulus packages and accelerate disbursement of public investment capital this year, Tung expected credit would increase in 2022, even in the first quarter when credit demand often declined in years before the pandemic.

A credit trend survey in Q1 2022 conducted recently by the SBV also showed banks expect credit demand to continue to improve in the first quarter and the whole of 2022, of which processing-manufacturing, import-export, housing purchase, electricity production-distribution and construction will be five sectors having the highest demand for loans in 2022.

Though savings interest rates are increasing, Tung forecast lending interest rates would continue to decrease in 2022 under the direction of the Government and the SBV.

Trinh Bang Vu, head of Shinhan Bank Vietnam’s loan division of individual customers, also expected with lending interest rates remaining at a low level, capital needs of individual customers to buy houses, cars and consumer goods would increase.

According to SBV Governor Nguyen Thi Hong, the banking industry cut lending interest rates three times totalling 1.8 percentage points in the past two years. The industry will strive to continually reduce the rate by 0.5-1 percentage points in 2022 and 2023.

To prepare capital sources to meet lending needs this year, banks have been adjusting up deposit interest rates to attract idle money.

VPBank in early February raised its rates for many terms by 0.7 percentage points per year compared to early January 2022. The highest online savings interest rate at VPBank is 6.7 percent per year for deposits from 50 billion VND with terms from 36 months.

Techcombank has also raised the rates of many terms by 0.4-0.5 percentage points per year from February 7, 2022. Accordingly, the highest savings interest rate at Techcombank is 5.8 percent per year, up 0.4 percentage points compared to the beginning of January 2022. This rate is offered to priority customers depositing Phát Lộc savings at the counter on 36-month terms or online savings on the same term.

Industry insiders forecast deposit interest rates would continue to increase in the near future when the credit demands of customers surge after the pandemic.


Source: VNS

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