The National Financial Supervisory Commission (NFSC) estimates that credit growth in 2017 will be at 18.7-19.3 per cent in its annual financial market review.

According to NFSC, long-term credit growth has been slowing down, following a period of continuous expansion during 2013-2016. Mid- and long-term credit currently accounts for 53.7 per cent of total credit, compared to the 55.1 per cent reported in 2016.

Credit inflows to the industrial, trade, and other services sectors now account for 78.4 per cent of the total credit, up 21.8 per cent compared to last year. Credit into agriculture rose by 18.7 per cent on-year, taking up 8.11 per cent of the total credit.

Credit streaming into real estate and construction activities, on the other hand, has been reportedly on the wane this year, producing an increase of 12.2 per cent compared to the same period last year, with credit growth accounting for 15.8 per cent of 2017’s total credit (growth was reported at 17.1 per cent in 2016). Of the growth, the construction sector accounted for 9.9 per cent, while real estate for 5.9 per cent.

Consumer credit, meanwhile, has carried on its robust growth since 2015. Growth is estimated at 65 per cent at present, compared to the 50.2 per cent in 2016, accounting for 18 per cent of the total credit for the year.

Lending for house renovation and repairs, on record, accounts for 52.9 per cent of the total consumer credit, up of 76.5 per cent, while it was 78.4 per cent in 2016.

Loans for home appliances is projected to grow at 6.5 per cent, accounting for 15.3 of the total, while vehicle loans may increase some 35.2 per cent on-year, taking up 8.3 per cent of the total consumer credit.

Lending is on the rise, with growth anticipated at 19.3 per cent in 2017

Deposits, however, are growing slower than credit, and are slower than last year's deposit growth, according to the financial commission. Fund mobilisation in 2017 is anticipated to rise at 16.9 per cent against the end of 2016 (the growth was reported at 19.3 per cent last year).

VND-denominated deposits will continue dominating the total deposits, growing at 18.4 per cent on-year and accounting for 90.5 per cent of the total. Last year, VND-denominated deposits were reported with a growth of 22.1, accounting for 89.1 per cent of the total deposits.

Foreign currency-denominated deposits, meanwhile, are forecast to grow 4 per cent on-year, accounting for 9.5 per cent of the total deposits. The low foreign currency deposits are noted to be the result of the 0 per cent USD-denominated interest rate.

The liquidity of the system is said to be rather steady, with loan-deposit ratio (LDR) recorded at 87.3 per cent, better than the 85.6 per cent last year.

VIR