CATEGORIES

© Copyright 2004; Hanoitimes - Economic and Urban Newspaper;

The tribune of Hanoi People’s Committee

Publication Permit: 29/GP-CBC

Editor - in - Chief: Nguyen Thanh Loi

Managing Editor: Ta Thu Giang

Email : thugiang@hanoitimes.vn

Head Office: 21 Huynh Thuc Khang Street, Dong Da District, Hanoi

Branch Office: 221 Tran Phu Street, Ha Dong District, Hanoi

WORDS ON THE STREET 70th anniversary of Hanoi's Liberation Day Vietnam - Asia 2023 Smart City Summit Hanoi celebrates 15 years of administrative boundary adjustment 12th Vietnam-France decentrialized cooperation conference 31st Sea Games - Vietnam 2021 Covid-19 Pandemic
Home / Economy / Banking & Finance
Vietnam banks long for foreign capital
Ngoc Thuy 07:00, 2018/09/12
Securing long-term finance is considered a common challenge for Vietnamese banks, CafeF reported.
A growing number of Vietnamese banks are seeking long-term lending from foreign financial institutions in recent years. 
 
Illustrative photo.
Illustrative photo.
Recently, International Finance Corporation (IFC), a member of the World Bank, is expected to provide Orient Commercial Bank with long-term funding of US$100 million, aiming to expand the latter's lending portfolio to retail and small and medium enterprises (SMEs), Deal Street Asia reported. 

Saigon - Hanoi Commercial Bank (SHB) signed two loan agreements with International Investment Bank (IIB) and International Bank for Economic Cooperation (IBEC), both from Russia, last week worth US$20 million and EUR20 million (US$23.16 million), respectively. 

According to SHB, funds from IIB will support the bank in infrastructure development projects in Vietnam, as well as projects involving SMEs and green energies. Meanwhile, IBEC's provision of US$23.16 million loans to SHB is expected to support international transaction, including transactions of import - export activities between IBEC's country members.

In August, LienVietPostBank signed a US$50 million credit agreement with JPMorgan Chase Bank to supplement medium and long-term foreign currency to the bank. 

In recent years, Vietnamese banks have been seeking financial supports from foreign organizations. In the beginning of the year, IFC provided a syndicated loan of US$100 million to TienPhong Commerical Bank (TPBank). The IFC-led financing package will help TPBank to further extend long-term funding to micro, small and medium enterprises, and individual borrowers through digital delivery channels.   

Similar moves were conducted by banks in 2017, including a US$100-million loan from Deutsche Bank and US$41 million from Credit Suisse for Vietnam Prosperity Commercial Bank (VPBank). 

Another syndicated loan of US$150 million from IFC was also provided to An Binh Commercial Bank (ABBank) to boost lending to SMEs by the end of 2017. 

Securing long-term finance is considered a common challenge for Vietnamese banks, especially when the proportion of short-term capital to be used for medium- and long-term lending by banks in 2018 will be 45% instead of the previous 50%, and this ratio will be further reduced to 40% in 2019. 

Moreover, mobilized interest rates of banks have been increasing over the last two months, indicating high demands of lenders for capital. 

Under this circumstance, seeking loans from financial institutions is considered a feasible solution and balance source of capital for medium- and long-term lending. This option would help banks increase profitability as commercial banks can still provide short-term loans in foreign currencies to export firms by the end of 2018 under the SBV's instruction. Meanwhile, it is increasingly challenging for banks to mobilize foreign currencies with 0% of interest rate as regulated by the State Bank of Vietnam. 
Comments
Other news
15:51, 2025/02/24
Vietnam set to have digital banks within financial centers
Credit institutions headquartered in these financial centers will not be bound by restrictions on to foreign ownership or foreign investment conditions when providing services there or across borders.
14:30, 2025/02/15
Hanoi expands cashless parking pilot program
Hanoi is advancing its efforts to integrate technology into urban management by expanding the pilot program for cashless parking payments throughout the city.
16:58, 2025/02/11
Prime Minister urges banks to prioritize economic support over profits
One of the key priorities for the banking sector is to support small and medium-sized enterprises (SMEs), as they generate a large number of jobs and contribute significantly to the economy.
17:23, 2025/02/07
Vietnamese Gov’t forecasts CPI growth of up to 4.5% in 2025
With the goal of at least 8% GDP growth, the money supply in the economy will be significantly larger than in 2024. This will have an impact on price indices, particularly consumer prices.
17:51, 2025/01/07
Vietnam prioritizes agriculture and renewable energy for access to green loans
The move is part of the government’s effort to accelerate economic restructuring and build resilience to climate change while protecting the environment.
16:49, 2025/01/06
Vietnam GDP expands by 7.09% in 2024
The 2024 growth rate is considered positive amidst global uncertainties and domestic challenges such as natural disasters.