Report of Viet Dragon Securities Corporation (VDSC) said that by the end of September 2019, credit growth was estimated at nine percent, lower than 10.3 percent of the same period last year. Compared to the target of credit growth for the whole year of 2019, the lending threshold can increase to five percent.
Based on the situation of credit growth at listed commercial banks, VDSC estimated that with the current growth rate and the credit ceiling for each bank, the credit growth for the whole year of 2019 might reach only 13.2%. If this happened, this would be the lowest credit growth in the last decade in Vietnam.
The current low credit growth results mainly come from state-owned commercial banks, including Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV), Vietnam Joint Stock Commercial Bank for Industry and Trade (Vietinbank) and Vietnam Bank for Agriculture and Rural Development (Agribank), while the performance at other private joint-stock commercial banks was still impressive. Thus, would the State Bank of Vietnam (SBV) reallocate the credit ceiling among banks to reach the credit ceiling set at the beginning of the year?
According to analysts, on the one hand, joint-stock commercial banks such as Vietnam International Commercial Joint Stock Bank (VIB), Tien Phong Commercial Joint Stock Bank (TPBank), Vietnam Prosperity Joint-Stock Commercial Bank (VPBank) or Military Commercial Joint Stock Bank (MBBank) all recorded good credit growth in the first nine months of 2019, and were currently reaching loan limit, closed to the credit limit allowed by SBV.
Meanwhile, the credit growth of BIDV and Vietinbank was only 8.6 percent and 3.2%, far from the target at the beginning of the year, respectively 12 percent and 7%. According to the orientation of SBV since the beginning of the year, banks with excellent asset quality could fully extend their lending limits. That happened in mid-2019 when the banks mentioned above met Basel II standards.
On the other hand, in terms of macro balance, the difference in credit growth and nominal GDP was too high, meaning that the surplus of money in the economy and vice versa.
Currently, the gap was at five percent, much lower than the period 2015 to 2017, seven percent to 11%. Compared to 2018, by the end of the year, the difference dropped sharply to three percent from the previous six percent due to fluctuations in the world macroeconomic, causing credit and money supply growth to be tightened drastically since Q3/2018.
In the current context, both domestic and foreign economic developments were quite positive with interbank interest rates returning to the period of 2017 to 2018, VDSC assessed that SBV was eligible to consider adjusting the credit ceiling for banks. Currently, VDSC noted that some banks were applying for expanding lending limits from SBV.
