Recently published data of the State Bank of Vietnam (SBV) showed that, in the first two months of 2020, deposits of economic organisations decreased by 4.84 percent compared to the end of 2019, to more than 3.96 quadrillion dong. This net withdrawal was equivalent to more than 191 trillion dong, double the amount of net withdrawal in the same period in 2019. In contrast, the deposit of residents increased significantly with 3.91%, exceeding the milestone of 5 quadrillion dong. However, total customer deposits of the banking system still decreased slightly by 0.035 percent in the first two months. Besides, the entire means of payment increased by 0.94%, partly due to the increase in the proportion of cash circulating in society.
In addition to deposit data and total means of payment, SBV also announced details of credit growth in the first two months of 2020. Accordingly, the credit growth of the whole economy was 0.17%, loan balance subsequently reached more than 8.2 quadrillion dong. Specifically, the strongest credit growth was in the Transport and Telecommunications sector with 3.38%. However, this was a fairly modest scale with only 229 trillion dong. The construction industry also grew significantly higher than the average of 1.2%, reaching over 810 trillion dong. Next was the Industrial Sector with 0.82%, reaching over 1.57 quadrillion dong. The groups that recorded negative credit growth included Trade (-0.9%) and Agriculture, Forestry and Fisheries (-0.09%), most likely due to the impact of the Covid-19 epidemic. The rest of the other service activities credit grew at 0.04%.
In a recent meeting with government leaders, Governor of SBV, Le Minh Hung said that as of March 31, 2020, the credit balance reached 8.3 quadrillion dong, up 1.3 percent compared to the end of 2019 (the same period in 2019 increased by 3.19%). This was the lowest level in recent years due to the impact of Covid-19. According to the preliminary assessment of this agency, until then, the expected balance affected by the translation was about 2 quadrillion dong, accounting for about 23 percent of the system’s total balance, potentially posing risks to banking activities.
In particular, the balance of several affected economic sectors, such as Agriculture, forestry and fishery, mainly focused on fruit and vegetable, aquatic products, rubber, coffee, tea and pepper. That of mining sector focused primarily on coal, crude oil, metal ores. That of processing and manufacturing industry was concentrated in food, beverage, textile, cement and wood processing. Also, build-operate-transfer (BOT) and build-transfer (BT) transport projects had been affected.
Along with that was the business of minerals, fuels, construction materials, automotive and spare parts business; Carriage; Accommodation, eating and travelling services; Real estate business activities; Education and training; Other service activities (repair of appliances, household appliances, health promotion services, laundry, haircut, funeral, and so on.)
