The business and production activities of enterprises were affected severely by the Covid-19 epidemic. Facing this fact, banks had made moves and solutions to support customers to overcome difficulties. Talking to reporters, Orient Commercial Joint Stock Bank (OCB) general director Nguyen Dinh Tung said that the bank was implementing many solutions to support sharing difficulties for businesses.
Nguyen Dinh Tung told the press about the solutions to support customers of the bank at this time.
According to him, the whole banking industry in the recent period had responded promptly and adequately. Banks themselves and businesses cooperated closely and openly. The advantage was that the banks’ financial health was much better than in previous years. Thus, the level of resilience to shocks was better, and since then, there were many policies to support businesses. This was very important.
As for OCB, currently, the bank closely followed the activities of each enterprise and customer group to carry out appropriate solutions. For example, the bank was reviewing individual borrowers in the form of consumer loans, house purchases, and daily activities with small and medium values ranging from several tens of million dong to several hundred million dong. This was a group of customers who might be affected at present and possibly in the long run by the epidemic. The majority of customers were workers in factories, industrial parks, and offices, especially professions that had been directly affected by outbreaks.
In Tung’s opinion, these would be vulnerable subjects if the epidemic situation was prolonged. Therefore, for this group of customers with real difficulties, banks were willing to reschedule. For customers but with small value loans, the bank would also extend the debt to help them feel secure to work, psychological stability. OCB would prioritise emergency assistance. For other subjects, the bank would follow the guidance of Circular 01/2020/TT-NHNN on supporting customers affected by the Covid-19 epidemic.
This meant that banks would wait for the State Bank of Vietnam (SBV)’s new Circular to be implemented on a large scale
According to Tung, every bank must have at least a few tens of thousands, to a few hundred thousand customers, in large banks, this number was much higher. Only a few cases not complying with standards made banks’ control difficult. Moreover, banks were operating according to international standard principles, so the legal documents were full of laws, clear criteria that were important to ensure the transparent, safe, effective implementation of solutions. On that basis, banks also boldly introduced more measures to support businesses. Therefore, right after the Circular, the bank would base on the guidance from SBV to restructure debt, allow companies to pay debts by cash flow, debt extension in a synchronised manner.
However, Tung noted that not all customers could apply the above policies and solutions. The bank would carefully evaluate the situation of businesses being affected directly or indirectly by the above epidemic and then would give appropriate solutions based on the provisions of the Circular. In fact, not all companies wanted to restructure or extend their debts. Because companies having a reserve or other sources of income still managed to overcome this difficult period without debt restructuring, debt rescheduling. The fact was that whether structured or rescheduled, the debt was still maintained. If paying early, the company would reduce the pressure of interest payment.
Given this fact, when being asked about whether or not credit growth this year had been reduced, Tung answered that it was difficult to make an accurate judgment at this time. Risks from the disease, especially complicated epidemics, were non-traditional risks, which were beyond the forecast of both banks and customers. Thus, it was difficult to calculate the exact level of damage. If the epidemic were soon suppressed, the economy would likely recover quickly. This possibility was not excluded.
The time of the SARS outbreak also harmed the global economy, including Vietnam, but after about two months, the epidemic was extinguished, and the economy recovered very quickly. When economic activities returned to healthy, many fields rebounded sharply. Especially the growth momentum of Vietnam was quite good before this disease appeared. Hopefully, economic growth could be slow only in the first few months. After the epidemic was over, economic growth would rebound and could create a breakthrough in the last months of the year, supporting various industries, including credit growth. Therefore, from then until the end of the year, if the situation were favourable, credit growth would be higher. As for how to increase, it was difficult to determine the exact time.
Businesses affected by Covid-19 and commercial banks should not be too optimistic about strengthening themselves an excellent resistance and building many business scenarios to prevent the worst case, especially from the actual cause of being out of control.
The most important thing at the moment was that businesses must find new markets, restructure production, and trade towards more sustainable and minimise dependence on a market, a particular group. As for banks, it was essential to determine the threshold of tolerance and increase defense to ensure to survive through this challenging period. This was also an opportunity to review wasteful operations, which was not necessary to create a more compact, more efficient apparatus but still ensure the control capacity of banks.
