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Saturday, June 15, 2024

Credit grows strongly in Oct

By Dung Nguyen

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HCMC – The country’s credit growth reached 8.72% last month, much higher than the 6.5% in the same period last year, according to a report by the SSI Securities Corporation.

The higher-than-expected credit growth indicates signs of economic recovery after stringent social distancing measures were lifted early last month.

In October, some VND77.7 trillion was injected into the economy, nearly double that of the previous month. Of this, the trade and service sector received the most capital, at VND34.9 trillion, followed by the industry and construction sector with VND15.6 trillion.

As of the end of the third quarter of this year, most banks have approached their credit growth caps for this year. Therefore, SSI expected the State Bank of Vietnam to soon adjust up the upper credit growth limits for eligible banks.

The high credit growth was an important factor to help banks maintain high profits in the January-September period. However, credit growth seemed to slow in the third quarter due to the Covid-19 pandemic and banks’ higher credit risk provisions.

At a recent meeting with investors, Vietnam Maritime Commercial Joint Stock Bank CEO Nguyen Hoang Linh said the bank’s credit growth stood at nearly 16%, up from the 10.6% at the end of June. The bank expected its credit growth cap to be raised to 25% this year.

In a report on the banking sector issued early this month, Maybank Kim Eng Securities Limited forecast that the central bank would continue raising the credit growth caps in the last quarter to support the nation’s economic growth. Last year, credit unexpectedly surged in the last three months of the year and the central bank raised the credit growth caps twice.

According to SSI, both deposit and lending rates continued to fall slightly in October. Specifically, the deposit rates were 3%-4% for less-than-six-month savings, 3.7%-5% for six to 12-month tenors and 4.2%-6.5% for savings of over 12 months.

The lending rates stood at 5%-7% for short-term loans and 9%-11% for loans with a term of over 12 months.

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