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Syndicated loans ease risk of major projects
To reduce financial risk, local banks should join forces and set up syndicated loans for big business deals, participants were told at yesterday conference entitled Viet Nam Syndicated Loan Market.
Ana Dhoraisingam of ANZ, said: "Big business deals in Viet Nam have mainly been done on a bilateral, club basis, or short-term funding, which all pose great risk."
According to Thomas Oentoro, senior investment officer at the International Finance Corporation, Viet Nam is faced with a high inflation, along with tightened monetary policy, which increases the risk of taking out loans.
Both conclude that further syndication among banks here is long overdue.
"Viet Nam represents an important growth market for syndicated banks, even though transaction volumes remain relatively low," Dhoraisingam noted.
"The national economy continues to grow at record levels, with good prospects for sustained economic growth. Furthermore, a broader range of companies, particularly joint stock companies, are accessing syndicated loans. These things underscore the potential of your [Viet Nam’s] position as an destination for syndicated banks," she said.
Banks offering syndicated loans should focus on the private sector in the future, analysts believe, as its role and importance continues to expand.
VNS
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