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Wednesday, June 26, 2024

Total outstanding loans expected to expand 4.4% in Q1

By Nguyen Tan

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HCMC – Total outstanding loans in the economy are expected to rise by 4.4% in the first quarter of this year, signaling a departure from earlier forecasts, according to the State Bank of Vietnam’s Department of Forecasting and Statistics.

The department has projected a more optimistic outlook for the entire year, with a 14.2% increase in credit, 40 basis points higher than the previous forecast of 13.8%.

Citing a survey, the department stated that interest rates at commercial banks might dip 30 to 40 basis points in January-March, with a 20-basis-point decrease expected for the entire year.

It is anticipated that deposits will rise by 2.6% in the first quarter, followed by a robust surge of 12.1% throughout 2024.

Despite hopes for a fall in bad debt, the survey pointed out that the ratio of non-performing loans to total gross loans among banks picked up in the fourth quarter of 2023. However, optimism remains as a mild reduction is projected for quarter one of 2024.

The performance of Vietnam’s banking sector in the final quarter of last year improved mildly compared to the preceding quarter. However, results fell short of expectations, with 78.6% of banks expecting positive pre-tax profit growth in 2023, 17.9% seeing a contraction, and 3.6% experiencing no change.

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