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Vietnam - Banks play down Gov’t credit growth, money supply targets

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Vietnam - Banks play down Gov’t credit growth, money supply targets Empty Vietnam - Banks play down Gov’t credit growth, money supply targets

Post by lexie Thu Sep 29, 2011 1:18 pm

September 29, 2011


Banks play down Gov’t credit growth, money supply targets




Several banks have played down the significance of the Government’s recent resolution to reduce credit growth and money supply targets, saying the move would not affect their operation simply because they do not have funds to boost lending.

The Government in the September meeting required the total money supply and credit growths to be kept at 12% and 15-17% respectively, meaning a contraction of three percentage points.


A banker in HCMC’s District 1 said the credit growth at his bank was zero as of end-September, and the lender focused more on collecting debts instead. In addition, deposits at the bank have dwindled by 10% since September 7.


Finding good corporate clients is not easy these days as they have been served at other banks, said Tran Phuong Binh, general director of Dong A Commercial Bank. Loans towards the year-end are mainly for old clients with rates lowered gradually, he said.


An Binh Bank also finds it hard to get a credit growth of 20% this year as the lending rate is still high, said general director Tran Thanh Hoa. The bank has tried to cut non-productive loan ratio down to 16% as required by the State Bank of Vietnam.


The cut of three percentage points in credit supply does not have much impact on banks. The money flow needs to be reconsidered to be in tune with the economy’s absorption capacity, otherwise it may cause inflation, she said.


A well-known stock expert also said the Government’s move was merely a response to the market condition.


Fiachra Mac Cana from HCMC Securities Co said the Government’s adjustment is not a tightening policy but a move reflecting the real growth rate from the year’s beginning.


“The credit growth year to date is around 8-9% only so the new target still allows generous room for expansion between now and the year-end…,” he said



http://www.vietfinancenews.com/2011/09/banks-play-down-govt-credit-growth.html

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