Vietnam Credit Growth + 15% in Jan-August

Vietnam Credit Growth + 15% in Jan-August

Posted: Monday, September 13, 2010

Total outstanding loans of local banks grew at a slow rate of 2.1% in August, resulting in eight-month growth of 15% versus full-year target of 25%, said the Vietnam National Financial Supervision Committee.

 

The country’s broadest measure of total money supply, M2, rose 13% compared to the full-year estimate of 20%, the committee added.

 

This is the second consecutive month the country’s credit growth has been slowdown though local corporate demand remains high, said the committee.

 

The credits rose 2.91% in June and 2.45% in July, the committee noted without clarifying the growth of outstanding loans in dong and in foreign currencies in the first eight months.

 

A recent data from the State Bank of Vietnam has shown that the forex credit growth of banks in Ho Chi Minh City, the country’s largest economic and financial hub, still outpaced the dong one between Jan and Aug.

 

At end-Aug, total credits of banks in HCM City rose to VND620 trillion, in which loans in foreign currencies were up 28.5% from end-2009 versus the modest dong credit growth of 5.8%.

Local banks have ever been warned of unsustainable credit growth since their total dong loans increased only 4.5% in the first half, compared to a surge of 27% in forex credits with U.S. dollar being the majority.

 

Such imbalance is likely to put more pressures on U.S. dollar supply at local banks since their dollar-denominated deposits have been shrunk off over the months. (Labor)