The State Bank is worried about big risks when credit flows into real estate
94% of real estate loans are for medium and long-term loans, while the bank’s mobilization sources are mainly short-term, so the Governor considers this to be a risk.
The management and control of credit in potentially risky areas, especially real estate lending, is one of the issues that Governor Nguyen Thi Hong will answer questions about before the National Assembly, expected on the afternoon of June 8. .
In the question-and-answer report just sent to the National Assembly, the State Bank said that currently, about 94% of real estate credit outstanding loans are medium and long-term loans (10-25 years), while the mobilization of Banking is mainly short term.
“The difference in terms and interest rates between capital and lending in this field is very risky for banks,” the State Bank’s report stated.
Governor Nguyen Thi Hong said that the State Bank assessed real estate investment and business “as one of the risky areas for banking activities, requiring control solutions”.
She analyzed that the real estate market fluctuated strongly, the situation of inflated prices caused a virtual real estate fever, land auctions at unusually high prices, etc., which affected the credit level, the valuation of collateral assets of the investors. credit institutions.
According to the State Bank of Vietnam, by the end of April, the total outstanding real estate loans of credit institutions was more than 2.28 million billion VND, up 10.19% compared to the end of 2021. This level accounts for about 20.44% of total outstanding loans to the economy, and the bad debt ratio of this sector is about 1.62%.
Therefore, the banking industry is closely monitoring the growth rate of outstanding loans and credit quality with the securities and real estate sectors to promptly detect potential signs of risks and take appropriate measures. system security.
Real estate in the east of Ho Chi Minh City, April 2022. Photo: Quynh Tran
Ms. Hong said that the activities of inspection and examination of credit applications in the real estate sector are being carried out by specialized agencies of the State Bank. This is to promptly handle violations in credit granting, and to make recommendations to limit risks of credit institutions.
In the coming direction, the Governor said, the State Bank will strictly control credit in potentially risky fields, including real estate investment and business. The demand for loans to buy social housing, housing for workers or cheap commercial housing… is encouraged.
This agency will increase inspection and closely monitor the granting of real estate credit to promptly take measures to ensure safety in the operation of credit institutions.
Also according to the State Bank’s report, by May 31, credit increased by 8.04% compared to the end of 2021, and increased by 16.94% over the same period last year.
In 2022, the pressure on credit growth is high due to a combination of many factors, such as the slow disbursement of public investment, making the economic recovery capital heavily dependent on bank credit. In addition, deploying the interest rate support package of VND 40,000 billion in 2022-2023 in the context of increasing inflation pressure, the credit-to-GDP ratio is already at a high level, causing many challenges in credit management.
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