return icon

Credit rises 8.54% by July 29

Credit rose 8.54 per cent by July 29 against late last year while mobilised capital surged 9.94 per cent, the State Bank of Vietnam reported August 11.
Credit rose 8.54 per cent by July 29 against late last year while mobilised capital surged 9.94 per cent, the State Bank of Vietnam reported August 11.


At a meeting held in Hanoi yesterday to review banking operations in H1 and outline plans for the rest months of the year, SBV deputy governor Nguyen Thi Hong said that liquidity of the banking system is good and becomes abundant while the inter-bank interest rate reduces as compared to the end of last year.

According to Hong, since the beginning of this year, keeping lending interest rate steady in 2016 has been considered a tough task for the central bank due to a forecast of rising inflation. However, the central bank will try to keep the rate stable in the late months of the year in a move to support business and production.

To meet the target, the central bank has so far taken measures to stabilise the deposit interest rates, which would help commercial banks cut the lending rate.

She said that in the rest months of the year SBV will continuously instruct commercial banks to balance their mobilised capital sources and lending capital sources to stabilise deposit interest rates.

Besides, Hong said, better business performance and lower input costs are also required for maintaining lower lending rates in the remaining months.

Hong reported that the non-performing loans (NPL) ratio of the entire banking system by the end of June stood at 2.58 per cent, down against 2.78 per cent in May.

Commercial banks reported that they handled VND59.71 trillion (US$2.66 billion) of NPLs in the first half of the year, of which VND8.8 trillion were sold to the VietnamAsset Management Company.

Cut in lending interest rate feasible: NFSC

It is possible to reach the central bank’s target to cut lending interest rates in the final months of the year to support business and production, according to the National Financial Supervisory Committee (NFSC).

Under the latest macro-economic report released this week, the Government’s financial watchdog NFSC noted that the cuts were possible due to many favourable conditions.

As noted in the report, liquidity at commercial banks is abundant, supporting the banks in lowering lending rates next month.

NFSC analysts attributed the high liquidity to rising mobilised capital in the first half of this year. By the end of June, mobilised capital in the banking system rose 10.2 per cent against early this year, while credit rose only 8.16 per cent.

Statistics from the State Bank of Vietnam(SBV) also showed that overnight inter-bank rates, as of July 18, also fell 0.14 percentage points against June, the lowest level in recent years.

Further, SBV continued to withdraw more than VND26 trillion within some three weeks, from July 1 to July 22.

Other positive macroeconomic indicators, including G-bonds, inflation and foreign exchange rates, have also backed banks in lowering lending rates.

According to the NFSC report, pressure on interest rates has also been reduced thanks to positive results in G-bond issuances this year. The State Treasury of Vietnam has, so far, successfully issued total G-bonds worth roughly VND212 trillion, meeting 85 per cent of the annual plan.

G-bond interest rates have also been continuously reduced, staying at roughly 6.1-6.5 per cent per year for five-year bonds, 7.65 per cent per year for 11-year bonds and 8 per cent for 30-year bonds.

Also, though inflation this year is forecast to be higher than last year, it is expected to remain at the low level of roughly 3.5 to 4 per cent, according to NFSC analysts.

The foreign exchange market this year has also been relatively stable and the forex rate is expected to rise by around 3 per cent in the second half of this year.

In addition, commercial banks have, so far, reported positive business performance results in the first half of the year, which will help the banks handle non-performing loans and cut operational costs.

According to NFSC analysts, thanks to the favourable conditions, commercial banks can cut lending rates in the last months of 2016. However, banks must also cut operating costs and speed up the handling of bad debts to better reduce costs, they said.



EuroCham Chairman praises strong and forward-looking government

Vietnam’s recovery has been ensured by strong and forward-looking government support which helped to bring in more high-profile FDI projects

Many firms suspend raising capital from stock market

Many enterprises have either stopped mobilizing capital or changed their capital-raising plans on the stock market amid existing uncertainties and disadvantages.

HCM City runs out of Covid-19 vaccines

HCM City has run out of Covid-19 vaccines over the past 10 days, said Nguyen Hong Tam, the deputy director of the municipal Centre for Disease Control and Prevention.


Chinese police hand over wanted man to Lao Cai authorities

Foreign-invested enterprises face up to procedural barriers

Administrative procedures such as a prolonged timeline for obtaining business licences, as well as overlaps in the legal framework, are continuing to affect the expansion plans of many foreign-invested enterprises in Vietnam. Vietnam among ten attractive destinations to escape Europe’s winter

With its year-round warm tropical climate, breathtakingly beautiful scenery, and exciting culture, Vietnam is gradually becoming an attractive destination for German tourists.


Real estate sector faces debt default risk

Shan Tuyet tea, valuable timber plants named ‘Vietnam Heritage Trees’

More than 1,300 Shan Tuyet tea plants in Ha Giang province and a group of valuable timber trees in Dak Nong province have been recognised as “Vietnam Heritage Trees”.

Fast fashion brands scale up for growth

Surviving and developing in a competitive fast fashion market remains a challenge for many brands, especially for newcomers.

Arguments arise as properties required to be traded on exchange

Controversy has arisen over the Ministry of Construction’s draft of the amended law on real estate trading as it requires real estate products to be traded on an official exchange.

Boeing accelerates cooperation with Vietnamese suppliers

Boeing, the world’s leading aerospace company based in the US, are accelerating cooperation with Vietnamese suppliers and universities to provide a foundation for long-term industrial growth.

Expecting coffee exports to hit a record $4 billion

Vietnam Coffee Cocoa Association (Vicofa) forecasted that if the export price of coffee remained at a high level, as in the first half of the year

Major investors worry as stock market weakens

The stock market boards have been covered with red amid investors’ rising caution. There are few buyers, while selling pressure still exists. Foreign investors’ behavior has affected the market.

Vietnam sees great potential in ASEAN halal market

Despite opportunities available in the ASEAN halal food market, Vietnamese exporters have to date exported only a small amount of halal products to some countries in the region.

Vietnam is becoming a beacon in the region: The Brussels Times

The Brussels Times of Belgium has run an article highlighting that Vietnam is becoming a beacon in the region with the capacity to control inflation and maintain economic growth at a high level despite turbulent international affairs.