Vietnam’s banking sector is struggling to meet its credit growth target of 12 percent this year. Photo credit: Vietnam News Agency
Lending by Vietnam banks will rise more than 10 percent this year as credit growth typically quickens in the second half, the central bank governor said.
Nguyen Van Binh, Governor of the State Bank of Vietnam, said though credit was up only 3.52 percent in the first half, the hike in the rest of this year would double that figure in line with market rules.
“Hence, lending in the second half will increase around 7 percent, sending the entire year’s credit growth to reach more than 10 percent,” new website Vietnam Plus quoted Binh as telling a meeting in Hanoi on July 9.
Binh also said the central bank would manage lending policies “more flexibly” to accelerate the credit expansion.
Earlier this month Nguyen Thi Hong, Director of the central bank’s Monetary Policy Department, said in a statement that the central bank loosened restrictions on dollar loans to boost overall credit growth.
Dollar credit expanded 12.03 percent in the first six months of this year while dong loans were up only 2.17 percent.
Vietnam’s banking sector is struggling to meet its credit growth target of 12 percent this year as many companies turn down bank loans to bolster production (given high inventories) and many others remain ineligible for loans due to their weak financial capacity.
The central bank governor said bad debt resolutions and support for businesses seeking customers would help improve credit growth.
The Vietnam Asset Management Company, a firm set up by the central bank in July last year to rescue debt-laden lenders, bought more than VND50 trillion (US$2.36 billion) of non-performing loans, according to Binh.
Binh also said foreign currency reserves remained unchanged at $35 billion.