Credit growth goal set at 18 per cent for 2017

January 05, 2017 - 03:00

The State Bank of Việt Nam (SBV) has set the target of credit growth at 18 per cent for this year while pledged to continue taking measures to control the credit growth so as to be suitable to the country’s economic development.

Customers do transactions at VPBank Hà Thành branch in the city’s Thanh Xuân District. The State Bank of Việt Nam targets credit growth in 2017 to reach 18 per cent while credit institutions expects it to be around 19 per cent. — VNA/VNS Photo Trần Việt
Viet Nam News

HÀ NỘI — The State Bank of Việt Nam (SBV) has set a credit growth target of 18 per cent for this year, and it pledged to continue measures to keep credit growth suitable to the country’s economic development.

At a conference to review the performance of the banking industry in 2016 and targets for 2017 on Wednesday, SBV Deputy Governor Nguyễn Thị Hồng said that credit growth controlling measures are aimed to ensure the safety and efficiency of the banking sector and the economy.

“They will also be used to ensure that loans go to the business and production sectors prioritised by the Government and prevent over-lending in risky sectors,” she said.

The central bank will continue implementing an active and flexible monetary policy this year--in close co-ordination with fiscal and other macro policies--to stabilise the interest rate level, just as it successfully did last year, and reduce lending interest rates if possible, Hồng added.

In 2016, short-term lending interest rates now hover around 6-9 per cent per year while medium and long-term rates stand at 9-11 per cent. Particularly, by the end of September last year, some institutions reduced their deposit rates by 0.3-0.5 percentage points and cut their lending rates by 0.5-1 percentage points.

Nguyễn Đức Long, deputy director of the SBV’s Monetary Policy Deparment, said credit of the whole 2016 grew by 18.71 per cent compared to the end of the previous year.

The rate fell within the range of credit growth rate of between 18 per cent and 20 per cent targeted for 2016.

Credit management has succeeded in curbing the rise of lending to the real estate sector and shifting the capital flow to production industries, Long said.

He added that loans in Việt Nam đồng increased strongly while lending in US dollar remained low, proving the efficiency of the Government’s anti-dollarisation policy.

Meanwhile, Vietnamese credit institutions expect credit growth to reach 19.12 per cent this year, of which lending in đồng will rise by 20.2 per cent, according to an SBV’s survey on business performance prospects of credit institutions for 2017.

The survey was conducted in the last two months of 2016 by the SBV’s Statistics and Forecasting Department, which questioned all credit institutions and SBV branches nationwide. The rate of response was 89 per cent.

The interviewees forecast a 16.76 per cent surge in capital mobilised for the whole year with deposits in đồng growing by 18.12 per cent.

The forecast is based on credit insitutions’ optimistic about stable macro-economic environment, higher GDP growth and inflation being kept at safe level which will facilitate the liquidity of the banking system.

Thanks to an improved business climate, 63 and 85 per cent of the surveyed institutions expect their business performance in the first quarter of this year and in the whole year to be better than last year, respectively.

Poor performing banks

The same day, Nguyễn Văn Hưng, deputy chief inspector of the SBV’s Inspection and Supervision Agency, said weaknesses in operations of DongABank and Sacombank will also be addressed drastically this year.

Meanwhile, three other insolvent banks that bought by the State at 0 đồng, including Việt Nam Construction Bank, OceanBank and GPBank, would continue to be strictly supervised.

He also said as of November 30, 2016, bad debt accounts for 2.46 per cent of outstanding loans. — VNS

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