In the first two months of 2020, economic institutions in Vietnam net withdrew VND191.76 trillion (US$8.2 billion) from the banking system, double the net withdrawal amount of VND95.9 trillion (US$4.1 billion) recorded in the same period last year, according to the State Bank of Vietnam (SBV).

Illustrative photo.

During the two-month period, deposits from economic institutions declined 4.84% against the end of 2019 to VND3,770 trillion (US$161.08 billion). By contrast, personal deposits climbed 3.91% compared to late 2019 to VND5.018 trillion (US$214.37 billion).

Overall, total deposits in the banking system as of end-February stood at VND8,788 trillion (US$375.38 billion), slightly down 0.035% compared to the end of 2019.

Data from the SBV indicated credit grew 0.17% in the two-month period to VND8,200 trillion (US$350 billion).

Enterprises in the fields of transportation and communications recorded the highest credit growth at 3.38% against the end of 2019, but accounted for 2.8% only of total outstanding loans at VND229.27 trillion (US$9.78 billion).

The construction sector came in second place, with its total outstanding loans rising 1.2% to VND810.52 trillion (US$34.58 billion), and the industry sector followed with a 0.82% growth rate, with total credit of VND1,570 trillion (US$66.96 billion).

Meanwhile, credit of the trade and agro-forestry-fishery sectors contracted 0.9% and 0.09%, respectively, and accounting for respective 22.2% and 8.7% of the total.

Other services saw credit up merely 0.04% to VND3,051 trillion (US$130.17 billion).

At a government online conference on April 10, SBV Governor Le Minh Hung said as of March 31, credit growth of the banking system stood at 1.3% against early 2020, significantly lower than the growth rate 3.19% recorded in the same period last year, but remained positive sign as the growth was flat in the first two months of 2020.

It is predicted credit institutions would inject VND900 trillion – 1,100 trillion (US$38.59 – 47.17 billion) into the economy this year, translating into a credit growth of 11 – 14%.

The SBV estimated outstanding loans affected by the Covid-19 pandemic at nearly VND2,000 trillion (US$85.76 billion), or 23% of total existing loans.