SBV’s standpoint on the credit growth ceiling is clear: it will not grant more credit ‘quotas’ to banks unless this is necessary. Commercial banks, which have been relying on lending, have to adjust their business targets.

LienViet Post Bank, for example, has lowered the targeted profit in 2018 from VND1.8 trillion to VND1.2 trillion.

However, many banks can have relatively high credit growth rates and have confidence in fulfilling the business plan. The credit growth rates of ACB, HDBank and TPBank were 11.7 percent, 15.1 percent and 16.2 percent, respectively, in the first half of the year.

Commercial banks have also reported very satisfactory profits for H1, many of which have nearly obtained profits projected for the whole year.

Vietcombank has got VND8 trillion pre-tax profit, fulfilling 57 percent of the yearly plan, Military Bank VND3,829 trillion (56 percent) and VIB Bank VND1.151 trillion (57 percent).

Some small banks have even made more impressive profits. Nam A Bank has got VND292 billion in pre-tax profit, equal to 97.3 percent of the profit projected for the whole year 2018.

The satisfactory business results gained so far this year give one reason to banks to keep optimistic about the business performance in 2018, though there is not much more room for credit growth.

HSC Securities has predicted that the total post-tax profit of listed banks would grow by 32.28 percent in 2018 and 22.52 percent in 2019. 

HSC commented that with new instructions released recently, it is highly possible that the central bank won’t lift the credit growth ceiling in the third quarter like it did in previous years. However, some specific banks may get additional quota for credit growth.

Analysts commented that healthy banks will still be able to obtain high profit while there is no need to increase the lending. They can expect profit from payment services, foreign currency trading and other operations.

There are two other ways for banks to increase their profit. First, cutting operation costs by improving the productivity and reducing unnecessary expenses. Second, improving the quality of loans. Both solutions are feasible for banks as the bad debt ratio of the banking system has decreased to one percent.

An SBV report showed that the credit had grown by 7.88 percent by the end of June. 

At the government’s regular press conference in late August, Deputy Governor of SBV Dao Minh Tu said that the figure had reached 8.5 percent by August 30, or half of the credit growth target set for 2018.

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