Vietnam Bank News

Lending against securities up   2009-07-21 - Viet Nam News

Outstanding loans against collateral in the form of securities or real estate in the first half of the year sharply increased over last year, according to a report from the State Bank of Viet Nam.

Bad debt ratios throughout the credit system in the first half of the year were still also under control, standing at 2.52 per cent of total outstanding loans, an increase of 0.35 per cent from late 2008.

Total outstanding real estate loans in the first half were also estimated to increase 10.48 per cent from last December.

Despite the high increases in these higher-risk loans, the outstanding debt still met current regulations which provide that outstanding loans cannot exceed 20 per cent of a credit institution's charter capital, the State Bank said.

Bad debt ratios throughout the credit system in the first half of the year were still also under control, standing at 2.52 per cent of total outstanding loans, an increase of 0.35 per cent from late 2008.

"The performance of the entire system of credit institutions has remained safe while still allowing the increased provision of credit and services to the economy, contributing to higher confidence for domestic and foreign investors," the State Bank report said.

The high increase in lending against securities and real estate collateral in the first half was mainly due to a sharp rise in such loans in May and June. Through the end of April, credit institutions reported that outstanding loans for securities had surged only about 4 per cent, while lending against real property was down nearly 12 per cent between December and April.

The State Bank also announced that, in addition to overall credit growth soaring during the first six months of the year by 17 per cent, total payments during the period also surged by 16.36 per cent, and banks' total deposits also grew by 16.2 per cent.

The State Bank projected that credit growth would surge roughly 25-27 per cent for the year, with the strong growth due mainly to the impact of the Government's subsidised-interest loan programme.

According to State Bank statistics, banks had loaned roughly VND377.7 trillion (US$21.2 billion) under the programme through July 16, of which State-owned enterprises had borrowed VND58.4 trillion ($3.28 billion); private enterprises, including limited liability companies, joint stock companies, and foreign-invested companies had borrowed VND249.6 trillion ($14 billion); and household businesses had borrowed VND69.6 trillion ($3.9 billion).

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