Vietnam central bank agreed on Thursday to lift the 2015 credit growth target ceiling for some lenders in a bid to boost economic growth and help stabilise the money market.
The State Bank of Vietnam (SBV) allowed lending this year by Vietcombank, the biggest lender by market value, and VietinBank to increase 16 percent from the end of 2014, from their initial targets of 13 percent each, it said in a statement on its website. (sbv.gov.vn)
It also adjusted lending targets at some other banks and branches, both domestic and foreign, without clarifying whether they were relaxations or restrictions.
The move comes as the Southeast Asian country seeks to boost growth while managing the banking sector's ratio of non-performing loans (NPLs), which soared a few years ago when the property market froze, compounded by risky lending and non-core investments by state-run firms.
Higher lending could help trim down the NPL ratio, which in May eased to 3.15 percent of total loans from 3.59 percent in February, a newspaper reported. That is closer to the target of 3 percent by the end of September.
The SBV said on Wednesday it would temporarily ban domestic lenders from opening new branches, offices, cash machines, representative offices and offer new services until they cut their NPL ratios to below 3 percent by the end of September.
Loans in Vietnam's banking sector grew 5.78 percent from the end of 2014 as of June 15, a rise of almost 19 percent from the same period last year and compared to the full-year target of 13-15 percent, the SBV said last month.