Banks tighten loans for real estate businesses

The banking industry sharply reduced outstanding loans for real estate business in the first half of 2021 and will continue such limits in the second half.

Banks tighten loans for real estate businesses hinh anh 1

Many banks have reduced outstanding loans for real estate business in the first 6 months. (Photo cafef.vn)

According to audited half-yearly financial statements, many banks have reduced outstanding loans for real estate business in the first six months.

LienVietPostBank's financial statements show that outstanding loans for real estate business fell by 52 percent to 1.67 trillion VND (72.6 million USD), leaving the proportion of real estate loans at the bank at only 0.87 percent.

At VPBank, outstanding loans for real estate activities decreased by 12 percent to 32.4 trillion VND. Meanwhile, the cash flow into personal loans to buy houses, and receive land use rights was still strong, with outstanding loans increasing by 26 percent to more than 45.8 trillion VND.

Outstanding loans for real estate business at ABBank decreased by 13 percent to 2.69 trillion VND, while cash flow was strong and grew in other areas.

At MBBank, loan balance for real estate business decreased slightly by 75 billion VND to 9.32 trillion VND, while the bank promoted credit flows into other areas such as household employment; wholesale and retail loans; automobiles and motorbikes; as well as manufacturing and processing.

MB's total credit balance increased by 10.9 percent in the first half of the year and reached more than 314.9 trillion VND. Currently, lending to real estate business only accounts for a very small proportion at MB of 3.31 percent.

On the contrary, there was some growth in loans for the real estate industry. The outstanding loans for real estate business and consulting activities increased by 3.7 percent to 4.91 trillion VND at ACB, by 11 percent to more than 101 trillion VND at Techcombank, and by 10.7 percent to 8.98 trillion VND at TPBank.

After a survey of credit trends of credit institutions by the Department of Forecasting and Statistics, the State Bank of Vietnam (SBV) and credit institutions said they would slightly relax their overall credit standards for most customer groups in the last six months of 2021.

However, banks are still expected to tighten loans for securities, real estate, finance, banking and insurance and tourism.

During the pandemic, though there has been reduction in lending interest rates to support businesses and people, and some banks have emphasised that support has not been applied for real estate business but by businesses providing accommodation services, restaurants, and manufacturing businesses that were essential for the economy.

 

Vietcombank recently said that it would continue to reduce interest rates up to 0.5 percent per year for all outstanding loans of customers in HCM City and Bình Dương province and reduce interest rates to 0 .3 percent per year for the entire loan balance of customers in other southern provinces and cities that apply social distancing according to Directive 16.

However, the bank noted, the above interest rate reduction does not apply to securities loans, real estate business loans and mortgage loans of valuable papers.

Meanwhile, many real estate businesses said they faced many difficulties in the pandemic and suggested that the banks should reduce the support interest rate for them as well.

Nguyen Thi Thanh Huong, General Director of Dai Phuc Land Company, told local media: “Real estate company are facing many difficulties, especially cash flow when their revenue stagnated in the pandemic but they still have to pay the bank interest and interest from borrowing from other sources without any support.”

Huong asked the banks to consider reducing interest rates, and freezing debts for real estate investors to have more resources to develop projects to launch in the fourth quarter of the year.

Previously, the HCM City Real Estate Association (HoREA) sent a written request to the SBV and commercial banks, asking them to support businesses including reducing loan interest rates by about 2 percent per year for real estate businesses, investors and home loan customers.

At the same time, HoREA suggested that commercial banks consider and create conditions for businesses, including real estate businesses, to access new loans for project implementation.

Responding to the real estate businesses, many experts said that the real estate lending interest rate had been very low for many years, and if it continued to decrease, the risk for the market was very high.

The recent land boom has left banks afraid to pour money into the industry while the SBV keeps saying that it will continue to strictly control credit flowing into risky areas, including real estate.

In order to help those who want to buy a house to live, many banks still have policies to reduce interest rates for their demand. However, they will carefully appraise loans to avoid loosening for speculators, according to experts./.

Source: VNS

 
 

Other News

.
Nike Group to expand investment in Binh Duong
Nike Group to expand investment in Binh Duong
BUSINESSicon  07/10/2021 

Sportswear giant Nike Group has affirmed that it will continue to expand production in Binh Duong province, said Nguyen Thanh Toan, Director of the Department of Industry and Trade of the southern industrial hub.

Vietnamese enterprises need cash to revive
Vietnamese enterprises need cash to revive
FEATUREicon  07/10/2021 

Nguyen Quoc Ky, Chairman of Vietravel, a big tourist company in Vietnam, said that due to the impact of the 4th wave of Covid-19 epidemic, the entire tourism industry of Vietnam has been closed since May 2021.

Business associations unhappy with weekly tests for vaccinated, recovered workers
Business associations unhappy with weekly tests for vaccinated, recovered workers
BUSINESSicon  07/10/2021 

Several business associations in HCM City have called for scrapping a requirement that workers commuting to the city from elsewhere need to undergo a weekly test for COVID-19 regardless of their vaccination or recovery status.

Govt' to consider zero-interest loans for all airlines
Govt' to consider zero-interest loans for all airlines
BUSINESSicon  07/10/2021 

The Vietnam Aviation Business Association asked the Government to consider a proposal to slash 30 per cent off the airlines' income tax for 2020 and the first half of 2021.

Incurring big losses, café chains shut down
Incurring big losses, café chains shut down
FEATUREicon  07/10/2021 

The Covid-19 pandemic, with changes in consumers’ habits and requirement on a minimum distance between customers, has dealt a strong blow to the (food and beverage) F&B industry.

Vietnam’s power development plan to boost LNG sector
Vietnam’s power development plan to boost LNG sector
BUSINESSicon  06/10/2021 

The outlook for Vietnam’s emerging liquefied natural gas (LNG) sector remains promising as the country’s need for the product is large to serve its power development plan, according to Fitch Solutions.

Serious worker shortage looms as factories resume operations after prolonged lockdown
Serious worker shortage looms as factories resume operations after prolonged lockdown
BUSINESSicon  06/10/2021 

Companies in HCM City and other industrial hubs like the neighbouring provinces of Binh Duong and Dong Nai are struggling with a labour shortage after the pandemic.

Vietnamese products at risk of trade violation investigations
Vietnamese products at risk of trade violation investigations
BUSINESSicon  06/10/2021 

The Trade Remedies Authority of Vietnam (TRAV) have warned that Vietnamese products are at risking of falling foul of anti-dumping and trade defence investigations. 

State to divest from six major enterprises, raking in US$600-800 million in Q1/2022
State to divest from six major enterprises, raking in US$600-800 million in Q1/2022
BUSINESSicon  06/10/2021 

The State Capital Investment Corporation (SCIC) is expected to divest capital from six major enterprises in the first quarter of next year, fetching between VND15 trillion and VND20 trillion (US$652-870 million) for the State budget.

VIETNAM BUSINESS NEWS OCTOBER 6
VIETNAM BUSINESS NEWS OCTOBER 6
BUSINESSicon  06/10/2021 

Enterprises survive the COVID-19 storm

Lefaso rejects rumours on Nike’s moving production out of Vietnam
Lefaso rejects rumours on Nike’s moving production out of Vietnam
BUSINESSicon  05/10/2021 

Recent rumours spreading on social media on Nike’s moving production out of Vietnam to China and Indonesia are incorrect, stated Phan Thi Thanh Xuan, Vice Chairwoman and General Secretary of the Vietnam Leather and Footwear Association.

Evergrande’s debt bomb a lesson for Vietnam
Evergrande’s debt bomb a lesson for Vietnam
FEATUREicon  06/10/2021 

Experts believe that the huge debt of $300 billion incurred by Chinese Evergrande will have an indirect impact on Vietnam.

Vietnam fails to collect tax from cross-border e-commerce
Vietnam fails to collect tax from cross-border e-commerce
FEATUREicon  06/10/2021 

As trading activities on e-commerce platforms bring huge profits, collecting tax has become a burning issue for many countries.

Red boards with this phrase appear densely on Hanoi streets
Red boards with this phrase appear densely on Hanoi streets
BUSINESSicon  05/10/2021 

“Shop for rent”, “space for rent”, “house for rent”, … are the phrases that appear most on the streets of Hanoi after two months of social distancing.

Ministry forecasts Vietnam’s GDP growth this year at 3%-3.5%
Ministry forecasts Vietnam’s GDP growth this year at 3%-3.5%
BUSINESSicon  05/10/2021 

The Ministry of Planning and Investment has projected the country’s gross domestic product (GDP) growth in 2021 at 3%-3.5%, down 0.5 percentage points from the rate forecast in September.

Businesses reopen in HCM City, but challenges remain
Businesses reopen in HCM City, but challenges remain
BUSINESSicon  05/10/2021 

After months of social distancing the reopening of the HCM City economy on October 1 has brought cheer to both businesses and the public.

VIETNAM BUSINESS NEWS OCTOBER 5
VIETNAM BUSINESS NEWS OCTOBER 5
BUSINESSicon  05/10/2021 

 Project aims to enhance trade remedy capacity as Vietnam joins new-generation FTAs

Hanoi removes 28 administrative procedures in investment
Hanoi removes 28 administrative procedures in investment
BUSINESSicon  05/10/2021 

Hanoi’s authorities have decided to remove 28 administrative procedures in the field of investment.

VIETNAM BUSINESS NEWS OCTOBER 4
VIETNAM BUSINESS NEWS OCTOBER 4
BUSINESSicon  04/10/2021 

Vietnam develops rural tourism through digital transformation

Construction ministry proposes legal amendment to prevent 'land fever'
Construction ministry proposes legal amendment to prevent 'land fever'
BUSINESSicon  05/10/2021 

Many real estate brokers lack professional knowledge and ethics and do ‘hit and run’ business, causing losses to customers by giving wrong advice or even cornering the market and causing artificial land fever.

 
 
 
Leave your comment on an article

OR QUICK LOGIN