HCMC – The banking system is facing a daunting task in lending out VND1,135 trillion in the rest of this year to meet the central bank’s 2024 credit growth target of around 15%.
The State Bank of Vietnam (SBV) set the full-year credit growth target at about 15%, meaning commercial banks have to inject a total of VND2,035 trillion in loans into the economy.
SBV data put total credit in the first eight months at less than VND900 trillion, averaging out at VND112.5 trillion per month.
To meet the 2024 target, banks will need to disburse an average of VND227 trillion per month in the remainder of the year, double the current pace.
The SBV’s business trend survey showed that banks initially anticipated a 14.2% credit growth rate in the first quarter of 2024. However, by the second quarter, expectations had dropped to 13.6%, below the annual target.
Credit risk remains a significant concern, particularly in lending to real estate investments and stock trading. Economic expert Nguyen Tri Hieu expressed skepticism about the possibility of injecting the remaining VND1,135 trillion into the economy in the final four months of the year.
While he earlier projected 15% credit growth for 2024, he now considers it tough due to the sluggish recovery in corporate and consumer loans, compounded by persistent global economic uncertainties.
The time has come to reconsider this form of credit management, he proposed. In the past, some banks enjoyed credit growth exceeding 50% driven by the pursuit of higher profits. However, achieving such growth has become increasingly challenging in recent years, Hieu added.
Associate Professor Dr. Nguyen Huu Huan from the University of Economics Ho Chi Minh City has the same view, saying that pushing for strong credit growth in the final months of the year, as seen in 2023, could lead to negative credit growth at the start of next year.
Huan said the current economic conditions do not justify aggressive credit expansion, particularly for businesses in production, trading and exports.
As of August 28, overall credit growth was only 6.63% compared to the end of 2023, still below half of the 15% annual target.
Although this marks an increase from the 5.66% reported at the end of July, it underscores the ongoing difficulties in achieving the year’s credit growth goal.
To boost lending, the SBV has allocated additional credit growth quotas to banks that have achieved at least 80% of their annual targets, resulting in 31 banks receiving extra credit growth quotas.
