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Credit growth slow in Ha Noi

Update: August, 26/2014 - 09:43
Cash transactions are conducted at a branch of Vietcombank in Ha Noi. Lending interest rates have fallen but many companies are still in difficulty. — VNA/VNS Photo Tran Viet

HA NOI (VNS)  — The outstanding loans of credit institutions in Ha Noi totalled about VND918 billion, or US$43.71 million, in August.

According to the municipal Department of Statistics, the amount increased 0.6 per cent over July, but fell 2.9 per cent over last December.

The total deposits in the capital reached nearly VND1.12 trillion, or $53.33 million, in August. This was up 0.6 per cent over the previous month and increased 6.8 per cent over the end of last year.

The lending interest rates have fallen, but stock market reports showed that many enterprises still suffered losses in the first half of this year. It will take more time for the companies and the economy to recover, market observers said.

In HCM City, outstanding loans grew 4.35 per cent in the first seven months of 2014, reported the Viet Nam Television (VTV).

Lending in the southern city increased 1.37 per cent in July alone, driven by prioritised sectors including agriculture and development of rural areas, exports, small- and medium-sized enterprises, high-tech firms and support industries.

Local banks saw redundant liquidity, but faced significant obstacles in finding borrowers earlier this year. However, municipal programmes linking banks and businesses have improved the lending situation in recent months.

Nguyen Hoang Minh, deputy director of the State Bank of Viet Nam's HCM City branch, said the number of dissolved companies was about two-thirds the number of newly established firms, and that the charter capital of enterprises also increased this year.

But Minh warned that bad loans tended to increase in the city. Debts facing risks of capital losses amount to more than 7 per cent of the total outstanding loans in the city, compared with the previous levels of 4.6 to 4.8 per cent.

Vietcombank

The head office of Vietcombank slashed the annual interest rates for dong deposits by 0.2 percentage point for almost all terms yesterday, reported news portal VnEconomy.

The new rates are 4.8 per cent for a one-month term, 5 to 5.7 per cent for terms of two to nine months, and 6.8 per cent for terms of 24 to 60 months.

The highest level of 7 per cent no longer appears on the bank's deposit rate listing board.

This is the second time that Vietcombank has proactively lowered dong deposit rates this year, and it currently lists the lowest rates in the domestic banking system.

The adjustments will reportedly help the bank cut operational costs and have better conditions to maintain low lending interest rates, after it achieved significant deposit growth in the first half of this year at 14.2 per cent.

The changes in interest rates provide reference for Vietcombank branches to set new rates based on their own conditions. — VNS

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