The central bank governor has sounded an optimistic note about the year's credit growth target of 12 percent, saying December 27 that it could be hit since there has been a surge in lending in recent days.
Online newspaper Dau Tu Chung Khoan (Securities Investment) quoted Nguyen Van Binh as saying at a meeting to review banks' performance that credit growth topped 11 percent after being 9.5 percent five days earlier.
Binh also promised to sustain efforts to reduce bad debts and consider loosening rules on debt classification and risk provision scheduled to take effect in June to ensure loan flows are not disrupted.
Banks have expressed concern that the stringent regulations that are proposed will make many businesses ineligible to borrow.
The central bank has said it does not plan to adjust policy interest rates in 2014.
Last year it cut the repurchase and refinancing rates by 2 percentage points to 5 percent and 7 percent.
Binh said deposit rates stood little chance of going down though inflation remains under control.
Last year consumer prices rose by a decade low of 6.04 percent.
News website VnExpress quoted an unidentified NamA Bank executive as saying that the interest rate spreads of 1-1.5 percent on corporate loans and 2-2.5 percent on retail lending are too narrow to be profitable.
His bank only expects to achieve half its profit target for 2013.
Major lender Eximbank also estimated that its profits were less than 50 percent of the target at VND1.5 trillion (US$71.2 million).
Binh acknowledged that the banking system faces a profit slump despite improving its health.
In 2012 profits fell by nearly 50 percent.
Nguyen Hoang Minh, deputy director of the central bank's Ho Chi Minh City branch, expected only half the banks in the city to hit their profit targets.
He blamed this on the larger risk provisions and decline in the lending interest rate cap to 13 percent, adding that lower interest rates alone represented a VND12 trillion ($569.4 million) fall in income.
Data released at the meeting showed that more than a fifth of 378 bank branches in the city reported losses.
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