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Credit, money supplies increase steadily
Credit grew by about 8.61 per cent in the first 10 months of the year, while the nation's money supply has grown by a rate of 7.5 per cent since the end of last year, the State Bank of Viet Nam announced in a monthly report.
Outstanding loans in both Vietnamese dong and foreign currencies throughout the banking system remained relatively stable in October, rising just 0.05 per cent over September's level. Cash in circulation was estimated to rise 1.09 per cent over the previous month and 0.9 per cent over the same period last year.
Credit growth so far this year has fallen well under the target of 18 per cent for the entire year and has represented the lowest rate credit growth in over a decade due to the Government's tightened monetary policies.
The State Bank report, however, did not reveal updated bad debt figures for the commercial banking system, which have become of increasing public concern. By late August, bad debts had totalled over VND76 trillion (US$3.62 billion) and had risen by a 0.7 per cent rate over July. Total bad debts have also rose from 2.53 percent in August 2010 to 3.21 per cent in August 2011.
In an attempt to secure the system and to make operations more transparent, the State Bank issued Circular No 35 establishing five core indicators for commercial banks pursuant to International Monetary Fund standards, including the non-performing loan ratio (NPL), capital adequacy ratio (CAR), sectoral distribution of loans ratio, return on assets (ROA) and return on equity (ROE).
Performance of banks under these indicators will be announced monthly, quarterly, semiannually, or annually, depending on each indicator.
"We affirm that all statistics regarding the banking system as well as the bad debt ratio are definitely correctly and are trustworthy," said Dao Minh Tu, head of the central bank's secretariat.
At last month's National Assembly Meeting, Prime Minister Nguyen Tan Dung targeted a 12 per cent credit growth rate for the year and a 12.5 per cent growth in the money supply.
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