Tuesday, 04/11/2008 18:40

No bank insolvent: SBV

Deputy Governor of the State Bank of Vietnam Nguyen Dong Tien affirmed that credit institutions have been operating safely with banks’ capital adequacy ratios higher than the minimum level of 8%.

According to Tien, by September 30, the bad debts of commercial banks had reached VND35tril, accounting for 2.92% of the total outstanding loans of the national economy, which should be seen as a low level.

It is expected that by the end of this year, bad debt may have become higher than 2.92%, but the ratio will not exceed 4%, the governor said.

As for real estate credit, which has attracted much investment capital and has suffered big impacts from the world’s economic changes, by September 30, the outstanding loans to the sector had reached over VND100tril, or 9.15% of total outstanding loans. Tien said that a figure below 10% should be understood as within control.

In the latest news, the State Bank of Vietnam yesterday released a decision to slash the basic interest to 12% while at the same time asking banks to slash lending interest rates and provide capital for effective real estate projects.

Bankers all say that it is now the right time to slash interest rates, as businesses need capital to make products for Tet sales; otherwise, they will face big difficulties.

The general director of a bank said that the lending interest rate should not be higher than 16% per annum. He said that even that rate would be a burden on businesses as sales are decreasing, while export companies are facing difficulties in exporting products while the world is tightening its belt.

Chairman of the HCM City Real Estate Association Le Hoang Chau said that if banks open their doors more widely to real estate developers, the real estate market could pick itself up quickly.

The general director of a company which now has three real estate projects in the southern Saigon area said that if he can borrow VND30bil for three months to implement the projects, 400 workers will have jobs, while the company could pay nearly all bank debts by mid 2009 when it finished the construction of the buildings’ foundations and sold apartments.

VNE, Tien Phong

Other News

>   Notice of the record date for bond interest payment (04/11/2008)

>   HCM_0103: Notice of delisting municipal bond (04/11/2008)

>   Property market slump has bad debts rising  (04/11/2008)

>   Central bank cuts key interest rates to spur growth  (04/11/2008)

>   Gold investors disheartened as volatility spikes (04/11/2008)

>   State bank cuts prime rate to 12 percent (04/11/2008)

>   Inclement weather holding domestic gold prices firm (03/11/2008)

>   Small banks: Increase chartered capital or merge? (03/11/2008)

>   Vietinbank issues international credit card Cremium (03/11/2008)

>   SBV Deputy Governor attends Russell Association Conference 20-20 (03/11/2008)

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