Banks have not been granted more room yet, credit growth has started to cool down
According to data from the State Bank of Vietnam (SBV), credit growth of the whole system as of May 27 reached 7.75% compared to the end of 2021. Although credit nearly doubled compared to the same growth rate of the same period last year. In the period of last year, the growth rate has slowed somewhat in the last two months when it only expanded by 1.78 percentage points (credit growth at the end of the first quarter was 5.97%).
SSI Research believes that the reason is partly due to the fact that the corporate bond market is in a period of slowing down (trading in corporate bonds is included in credit growth). On the other hand, credit growth at most major banks has almost reached the credit ceiling set by the State Bank at the beginning of the year, and therefore new credit disbursement will be considered more carefully by banks.
In fact, the rare strong growth of credit has caused many large banks to almost run out of “room” right at the beginning of the second quarter.
At Vietcombank, credit growth as of April 29 was 8.8%, almost full 10% of the room allocated by the State Bank since the beginning of the year. MB’s credit growth reached more than 14.3% after the first three months of the year, much higher than the 8.6% growth in the same period last year. HDBank’s loan growth more than doubled. Eximbank, Sacombank, TPBank, VPBank or SHB are also in the same situation.
At a recent conference organized by the State Bank of Vietnam, Mr. Nguyen Viet Cuong, Deputy General Director of Vietcombank, said that by the end of April, Vietcombank’s credit had grown at an “incredible” rate – over 9%, equivalent to a net increase of about approx. 100,000 billion dong.
According to Mr. Cuong, the credit demand of businesses after 2 years of Covid is like thirst after a drought, so it increases very quickly. With the current credit room, it will certainly not be enough. Therefore, Vietcombank’s representative suggested the State Bank to open credit room for banks in an appropriate way to participate in supporting customers.
A representative of BIDV said that according to a survey in the fourth quarter of 2021, the demand for credit growth of good customers is increasing, while the credit room is only over 10%, causing difficulties for banks. Therefore, the bank hopes that the State Bank will consider opening the credit room for BIDV and large credit institutions to be able to implement Resolution 31.
Similarly, a representative of Standard Chartered Bank in Vietnam said that without the interest rate support package, the demand for credit is already high, now with the interest rate support package, the demand is even higher. Therefore, he also proposed the State Bank to loosen the credit room.
Mr. Nguyen Quoc Hung – General Secretary of the Banks Association assessed: “The current capital demand is very large, the demand for growth in credit room of banks is very large. Therefore, it is necessary to balance the inflation level. to set a reasonable credit growth threshold, otherwise it will be difficult for banks when conditions are sufficient but cannot disburse due to the lack of room.”
Not only bank leaders, investors are also quite “impatient” when banks have not yet been granted additional credit growth limits.
According to expert Dang Tran Phuc – Chairman of the Board of Directors of AzFin, one of the reasons why banking stocks have not had many changes is because the market is concerned about the possibility of the credit room being withdrawn. narrow.
“In the first quarter, banks recorded very strong credit growth. In the first quarter, most banks have not yet been granted growth limits by the state bank. Many investors are worried about the main concern. The government can tighten the currency, so the credit growth room is not as comfortable as before,” said Mr. Phuc.
However, many experts still expect that banks will be granted more credit room to facilitate loan expansion and customer support. In which, banks participating in restructuring weak credit institutions will have the opportunity to grow at a very high level.
”In the first quarter of 2022, many banks have lent out their credit limit granted at the beginning of the year and are expected to be granted more room in the second quarter of 2022. Besides, we believe that, thanks to the new policies of the government, credit capital flow will be spread to production and business lines, thereby helping to grow the market sustainably in the future. BIDV Securities said.
Previously, the State Bank of Vietnam had 2 rounds of easing credit growth limits for commercial banks in 2021. The first time took place in mid-July and the second time at the end of November. As a result, TPBank is the bank that is granted the highest credit room, up to 23.4%; three other banks with a limit of over 21%, including Techcombank (22.1%), MSB (22%) and MB (21%). Following are VIB (19.1%), VPBank (17.1%), Vietcombank (15%), OCB (15%), ACB (13.1%), VietinBank (12.5%), BIDV. (twelfth%),…
Regarding the issue of loosening the credit room, Deputy Governor Dao Minh Tu said that right from the time of allocating the credit room in the first period, the State Bank has realized that this year’s credit will increase much more than the previous year. However, it is important to control credit growth to some extent to control inflation.
”Limiting credit growth is a very necessary proposal of commercial banks. And the management agency will also consider, calculate and administer the amount of credit given to the economy. In which, credit growth must first be consistent with the goal of controlling inflation, interest rate policy and other macro relationships; at the same time, creating room for the 2% interest rate support policy to be implemented,” Mr. Tu said.
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