Credit expected to achieve yearly growth target

As of August 16, credit had increased by 6.25% compared to the end of 2023, while by the end of July, credit increased by 5.66%, lower than the 6.1% rate recorded at the end of June.

Bank credit in August is showing signs of recovery (Photo: VNA)

In Ho Chi Minh City, credit in July reached 3.68 quadrillion VND (147.8 billion USD), down by 0.09% compared to the previous month, but up 11.47% year-on-year.

Deputy Director of the SBV’s HCM City Branch Nguyen Duc Lenh said that the slight decrease in credit in July was mainly due to the decrease in short-term credit and foreign currency credit.

However, Lenh believed that the socio-economic operation, production and business activities of enterprises, especially the sectors and fields that are economic growth drivers, are continuing to maintain a positive growth trend, which will be an important environmental factor to maintain and promote credit growth.

According to experts, credit growth in the first half of this year was supported by many factors, such as low lending interest rates and many interest rate preferential credit packages launched on a larger scale. Along with that, they were a driver from the recovery of production and positive signals from FDI, imports and exports.

Data released by the SBV shows in the first half of this year, interest rates for new and existing loans continued to decrease. By the end of June, the average lending interest rate was 8.3% per year, down 0.96 percentage point compared to the end of 2023. The average deposit interest rate was 3.59% per year, down 1.08 percentage points compared to the end of 2023.

Though there have been many increases in interest rates at banks, most of them are short-term interest rates, while medium-and long-term interest rates remain very low. At the same time, lending interest rates are still kept low according to the SBV's policy of supporting businesses and people.

It can be seen that with the current figures, the SBV’s target credit growth rate of 14-15% in 2024 is relatively challenging.

Previously, according to a survey on business trends in the second quarter of 2024 of the SBV’s Forecast and Statistics Department, credit institutions forecast that credit of the entire banking system will increase by an average of 3.8% in the second quarter of 2024 and 13.6% in 2024. Meanwhile, capital mobilisation of the system will increase by 3.5% in the second quarter of 2024 and 9.9% in 2024.

In fact, although credit has increased again since March this year, there is differentiation among credit institutions. Banks such as LPBank, OCB, HDBank and Techcombank, which specialise in corporate lending, have recorded high growth rates, while the group of retail banks have had lower credit growth rates.