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Credit growth rate low, US$ loans down dramatically
Despite the low interest rates and efforts by banks to push up loaning, credit growth remained at a low level in the first quarter of the year.
According to the State Bank of Vietnam, by the end of the first quarter of 2009, the total outstanding loans to the national economy had reportedly increased by 2.67% over the end of 2008. VND loans had increased by 3.9%, while foreign currency loans decreased by 2.24%.
The above said credit growth rate did not show any big difference compared to the credit growth rate of the previous two months. The 2.67% growth rate proves to be a very low growth rate if compared with the same periods of 2007 and 2008. In the first quarter of 2007, the credit growth rate was 6% over the end of 2006, while the credit growth rate was 10% in Q1 2008 over the end of 2007.
The 2.67% credit growth rate also proves to be a low figure considering that the conditions for loaning are favourable, while commercial banks have been pushing up loaning.
In early 2009, when the basic interest rate was 8.5% per annum, the maximum VND lending interest rate was 12.75% per annum. Since February 1, with the basic interest rate of 7%, the maximum lending interest rate has been 10.5%. The interest rates were thought would be attractive to businesses.
Meanwhile, most commercial banks began pushing up credit right at the beginning of the year. Sacombank, for example, plans to obtain a 50% credit growth rate this year, while Asia Commercial Bank (ACB) a 90% growth rate.
Despite the favourable conditions and efforts by commercial banks, the credit growth rate in Q1 2009, according to the State Bank of Vietnam, stayed at a low level.
The most noteworthy thing is that foreign currency loans decreased dramatically.
In January 2009, loans in foreign currencies increased by 1.91%, while they decreased by 2.69% in February over the end of 2008. By the end of the first quarter of 2009, the decrease had reached 2.24%.
Analysts say that they have learned from businesses’ shareholders’ meetings or business reports that enterprises now have decrease demand for borrowing money, or they tend to convert foreign currency loans into VND loans in order to avoid exchange rate risks as the dollar has been appreciating heavily.
The first quarter of 2009 was also when banks focused on disbursing money under the government’s interest rate subsidy programme. By April 3, loans of this kind had reached VND202,131bil.
VietNamNet/TBKTVN
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