Banks urged to further reduce capital costs, lending interest rates
Vietnam reached a credit growth rate of 6.63 and 8.53 percent in the first eight and nine months of 2024, respectively |
An additional VND1.16 quadrillion injected into the economy
The General Statistics Office’s (GSO) data show that Vietnam reached a credit growth rate of 6.63 and 8.53 percent in the first eight and nine months of 2024, respectively, meaning the growth increased by 1.9 percent (roughly VND260 trillion worth of capital injected into the economy) between August and September. The country witnessed a credit growth of 6.24 percent in the first nine months of 2023. Banks have injected nearly VND1.16 quadrillion into the economy since early this year.
VCBS Securities predicted the credit demand would increase in the remaining months of 2024 to reach 14 percent this year, as low interest rates will drive the borrowing demand and the economy has recovered. Credit growth drivers come from real estate, manufacturing, public investment, retail lending, SBV’s policies, and lending for post-typhoon reconstruction.
SBV Deputy Governor Pham Quang Dung said that credit growth in Mid-September was 7.26 and 5.73 percent higher than the end of 2023 and the same period last year, but remained lower than the 15-percent target set at the beginning of the year. The SBV official added that the focus should be on fostering credit growth that supports economic development.
Although credit growth has improved compared to 2023, Quang noted that businesses’ demand for loans remains low. Many companies have scaled back production and are cautious about taking on new loans. The real estate sector, which typically contributes significantly to annual credit growth, continues to face challenges.
Banks have injected almost VND1.16 quadrillion into the economy since early this year |
Businesses remain cautious about borrowing
Economists emphasized that strong recovery in trading and production activities is crucial to driving economic growth. After the damage caused by Typhoon Yagi, the banking sector has quickly restructured debt, lowered interest rates, and offered new loans to support recovery efforts. However, despite significant cuts in lending interest rates by many banks, businesses remain cautious about borrowing to expand production and other operations.
Specifically, some banks have reduced interest rates by 0.5-2 percent per year for individuals and small businesses in the northern region. VPBank, for example, has reduced its loan interest rates for all individual customers with existing loans and secured assets. The bank has cut rates subject to medium- and long-term, and short-term loans by one and 0.5 percent, respectively. This policy takes effect from September 13 until the end of this year. Meanwhile, TPBank will reduce up to 50 percent of interest payments for its existing individual customers affected by Typhoon Yagi until the end of January 2025.
A Sacombank representative said the demand for capital remains relatively low due to the slow recovery of exports and domestic consumption.
He suggested that the banking sector continue reducing capital costs, lower lending interest rates, streamline the processes and procedures for credit issuance, and increase preferential credit packages for certain industries and sectors to help customers access low-cost capital and increase their outstanding loans.
The Government should maintain an expansionary fiscal policy to boost the aggregate demand and stimulate growth. Measures such as tax and fee reductions would directly support consumer demand, helping increase the economy’s purchasing power. Payment intermediaries should reduce fees to allow banks to offer fee service to customers.
Associate Professor, Dr. Nguyen Huu Huan from the University of Economics, Ho Chi Minh City, believes that with the current pace of credit growth, the banking sector’s outstanding loans will likely improve in the final months of the year, as capital demand typically increases in the second half of the year compared to the first half. Over the past eight months, less than VND900 trillion has been injected into the economy, averaging VND112.5 trillion per month. To reach the credit growth target, the banking system will need to inject an additional VND1.135 quadrillion in the remaining four months of the year - a significant challenge./.
See also
HDBank wins three awards at Vietnam Listed Company Awards 2024
10:53 | 21/11/2024 Finance-Banking
VIB, Flywire partner to streamline cross-border payments for students from Vietnam
16:46 | 18/11/2024 Finance-Banking
Vietcombank issues 2 trillion VND worth of green bonds for first time
18:55 | 16/11/2024 Finance-Banking
UK stands ready to help Vietnam build international financial hub
17:13 | 13/11/2024 Finance-Banking
S&P affirms Techcombank’s BB- rating
10:10 | 11/11/2024 Finance-Banking
Tax sector fulfils nearly 95% of state budget collection target
15:38 | 09/11/2024 Finance-Banking
See more news
Việt Nam's stock market moves closer to emerging market status amid key policy changes
18:05 | 06/11/2024 Stock Market
Krungsri proposes accelerating purchase of 50% of SHBFinance’s charter capital
15:46 | 05/11/2024 Finance-Banking
Finance ministry proposes two price management scenarios for year-end
10:11 | 04/11/2024 Finance-Banking
Banking sector prioritises support for import-export firms
16:35 | 02/11/2024 Finance-Banking
Smart Banking 2024 workshop and exhibition held
15:32 | 31/10/2024 Finance-Banking
Interest rates expected to decrease by 0.7 percentage points next year
09:14 | 29/10/2024 Finance-Banking
Agribank named in Top 10 Vietnam Excellent Brands 2024
17:52 | 26/10/2024 Finance-Banking
Banks show positive results during third quarter
15:36 | 25/10/2024 Finance-Banking
Non-bank corporate bonds forecast to recover in year-end months
09:26 | 23/10/2024 Finance-Banking
Mandatory transfers announced for CB, OceanBank
09:51 | 21/10/2024 Finance-Banking
VAT tax reduction should continue until mid-2025: Ministry
17:15 | 21/11/2024 Policy
Top legislator starts official visit to Cambodia
17:09 | 21/11/2024 News and Events
Việt Nam and Malaysia upgrade relationship to Comprehensive Strategic Partnership level
17:01 | 21/11/2024 Cooperation
Hà Nội prepares for temperature drop as cold front approaches
16:56 | 21/11/2024 Environment
First Vietnam Dialogue opens new avenues for Vietnam-Germany financial cooperation
16:18 | 21/11/2024 Cooperation
Multimedia
Vietnam - Malaysia Strategic Partnership
10:54 | 21/11/2024 Infographic
Vietnam, Dominican Republic strengthening cooperation
08:45 | 20/11/2024 Infographic
Vietnam - Brazil strategic partnership
10:26 | 19/11/2024 Infographic
Nhon - Hanoi Station elevated urban railway comes into operation
09:04 | 18/11/2024 Infographic
Key facts on G20 and Vietnam's participation
09:42 | 17/11/2024 Infographic
VAT tax reduction should continue until mid-2025: Ministry
17:15 | 21/11/2024 Policy
NA deputies scrutinise investment policy for North-South high-speed railway project
08:54 | 21/11/2024 Policy
Developing relations with China is Vietnam’s top priority: Deputy PM
08:40 | 20/11/2024 Policy
Vietnam pledges to make more contributions to APEC cooperation
09:46 | 17/11/2024 Policy
Tra fish sector aiming for production, processing greening for sustainable development
15:38 | 20/11/2024 Industry
Solutions discussed to ensure coal supply for electricity generation in 2025
16:24 | 19/11/2024 Energy
Garment industry targets 47-48 billion USD in export turnover next year
16:16 | 19/11/2024 Industry
Residents support restarting Ninh Thuận Nuclear Project, call for clear roadmap
14:46 | 18/11/2024 Energy
Workshop seeks ways to attract Japan’s green investment to Vietnam
09:43 | 20/11/2024 Investment
Government approves investment policy to build Cam Lien Industrial Park in Quang Binh
16:57 | 18/11/2024 Investment
Disbursement of public investment must be accelerated: Deputy PM
12:17 | 17/11/2024 Investment
LG plans to pour further US$1 billion investment into Vietnam
10:42 | 16/11/2024 Investment
HDBank wins three awards at Vietnam Listed Company Awards 2024
10:53 | 21/11/2024 Finance-Banking
VIB, Flywire partner to streamline cross-border payments for students from Vietnam
16:46 | 18/11/2024 Finance-Banking
Vietcombank issues 2 trillion VND worth of green bonds for first time
18:55 | 16/11/2024 Finance-Banking
UK stands ready to help Vietnam build international financial hub
17:13 | 13/11/2024 Finance-Banking
Hà Nội prepares for temperature drop as cold front approaches
16:56 | 21/11/2024 Environment
Hundreds of damaged irrigation reservoirs need repairing
09:02 | 20/11/2024 Environment
Greening e-commerce crucial for sustainable development
10:47 | 18/11/2024 Environment
National Environmental Protection Plan ensures high quality living environment
08:59 | 18/11/2024 Environment
People, community at heart of digital transformation: Deputy PM
09:26 | 21/11/2024 Science - Technology
AI is core technology of 4th Industrial Revolution: Minister
11:19 | 20/11/2024 Science - Technology
Global scientific luminaries to gather at VinFuture sci-tech week
11:08 | 19/11/2024 Science - Technology
Hà Nội to host 2024 e-commerce and digital economy forum on November 21
17:23 | 17/11/2024 Science - Technology
Việt Nam-UK Institute plans for an international university
09:14 | 21/11/2024 Society
Hanoi aims to become a smart city by 2030
09:13 | 21/11/2024 Metropolis
Huế Central Hospital boosts international cooperation to become global health hub
16:30 | 20/11/2024 Society
Hà Nội hospital partners with UK charity to provide surgeries for children with facial deformities
16:03 | 20/11/2024 Society
VN takes part in food and beverage fair in Chicago
09:45 | 20/11/2024 Vietnamese Brands
Hòa Bình honey awaits reactions from UK
10:41 | 19/11/2024 Vietnamese Brands
Post-Typhoon Yagi trade networking event starts in Hải Dương
10:04 | 19/11/2024 Vietnamese Brands
Hòa Bình exports honey and pearl onions to UK
10:17 | 16/11/2024 Vietnamese Brands
Bac Ninh Province: Dong Ho folk painting needs urgent safeguarding
15:04 | 20/11/2024 Culture
Vietnamese designers tell stories of culture at Fashion Week
10:14 | 20/11/2024 Culture
Creative City promotes socio-economic development, says expert
09:59 | 20/11/2024 Lifestyle
Five Vietnamese creations listed among the world’s 100 best-rated dishes with coconut
10:54 | 19/11/2024 Culture
Blooming buckwheat flowers on Ha Giang roads
14:54 | 21/11/2024 Tourism
Folk cultural festival on Côn Đảo Island attracts tourists
10:07 | 20/11/2024 Tourism
Tra Que named among world’s best tourism villages in 2024
11:20 | 18/11/2024 Tourism
Quảng Ninh to attract more foreign tourists by year-end
16:52 | 14/11/2024 Tourism