The pandemic has been basically controlled in Vietnam and the government has relaxed the measures of social distance. Therefore, economic activities have also begun to recover. Credit activities therefore have shown better signals. According to newly updated figures as of April 28, 2020, the credit increased by 1.32 percent compared to the end of 2019. According to the leaders of the State Bank of Vietnam (SBV), the credit grew again in the last two weeks of April thanks to the banks’ deployment of preferential loan packages to support businesses and individuals affected by Covid-19. By the end of April, credit packages announced by banks were over 650 trillion dong.
Experts also forecast that credit demand will increase faster in the near future when production and business activities return to normal pace. In particular, the sectors and fields strongly affected by the Covid-19 epidemic such as tourism and aviation are forecast to recover at a faster pace. The recovery of domestic production also receives additional support when many countries around the world, especially the re-open of US and European economies.
Understanding that, banks have early prepared the capital to meet the rebound needs of businesses and the economy in the post-production period. The general director of Vietnam Prosperity Joint-Stock Commercial Bank (VPBank), Nguyen Duc Vinh, said that the bank had built the post-Covid-19 plan quite early. When the economic situation improved, the bank launched programmes to boost business. In addition to dealing with customers who request new loans, simplifying the procedures and processes, the bank focuses on reviewing the repayment schedule for customers affected by Covid-19 epidemic. As of May 4, there have been a total of more than 13,000 new disbursement records at the bank, equivalent to 18 trillion dong, with average loan interest rates reduced by up to three percent compared to the pre-epidemic time to support existing customers who face difficulties due to the effects of Covid-19.
By carefully preparing and elaborating business strategies to cope with various scenarios, Vietnam Bank for Agriculture and Rural Development (Agribank) has maintained the smooth banking operation and actively supported customers. In the first four months of 2020, the revenue from lending to the economy of Agribank reached 481 trillion dong, the average new loan was 120 trillion dong per month. For customers affected by Covid-19, Agribank has prioritised to focus on exempting and lowering interest rates for 27,500 customers, with a loan balance of 45.165 trillion dong. For the credit programme of 100 trillion dong supporting customers affected by Covid-19, so far, Agribank has disbursed over 10.03 trillion dong for 6,043 customers.
A member of the National Monetary and Financial Policy Advisory Council positively assesses the increases in credit supply that nurture enterprises in various fields of banks to prepare for the growth momentum after the disease. “Banks try to maintain supportive policies for another three to six months so the market can recover quickly. Even stronger recovery can be done to compensate for the previous damage to them,” he said.
In fact, the recovery pace of banks depends not only on the general changes of the market, but also on the intrinsic factors, past and future growth strategies of each bank, because customer portfolio as well as the asset structure of banks are different. There are banks mainly focusing on lending to corporate customers, but there are also banks specialised on retailing and individual customers.
So what will banks have to do to catch business opportunities in the remaining months of the year? general Secretary of Vietnam Banking Association Nguyen Toan Thang acknowledged that there would be many changes even after big changes. Business conditions, operating environment, market structure, and production methods of enterprises would change in the direction of supply chains, value chains, and automation, forcing credit institutions to adapt with.
Agreeing with the view, the general director of a joint stock commercial bank said that the post-pandemic economy will return to normal but will be in a different form than the previous period. From the change in habit of gathering in the crowd, increasing the use of online services, to prioritising health care themselves. Those businesses that follow the new trend will develop well. And the banks will invest more loans into these businesses.
“When the vibrant economy returns, banks will focus on the current good customer segments as well as the future potential to recover sales. And any bank that is in trouble will probably struggle in business if it does not find a new direction. In the coming time, the market, customers and even the banking system will have a differentiation,” he said.
VPBank leaders shared the view that when the disease situation had some positive results, the coming time was complicated, the bank had a plan to balance resources for at least six months. To ensure that the business situation of the bank was safe and effective but could also timely support customers to overcome this difficult period. Accordingly, in parallel with specific financial solutions to support each customer segment, VPBank has implemented many other solutions such as free online business training courses for small businesses; grasp the thoughts, aspirations of customers, from which offer appropriate support.
To create better rebound after epidemic, TS. Can Van Luc said that credit institutions as well as businesses needed to carefully study the market recovery trend after the disease to maximise opportunities, especially in logistics and retail. At the same time, enhancing IT applications, developing new business models on the basis of technology and suit new tastes of customers. Focusing on doing this well will help to increase labour productivity, reduce costs, and meet customer needs better.
