Vietnam’s credit growth expands 8.64% YTD
The current growth rate is less than two thirds of the growth target of 14% set for 2019.
As of September 24, Vietnam’s credit expanded 8.64% against the end of 2018, which is less than two thirds of the growth target of 14% set for 2019, according to Dao Minh Tu, deputy governor of the State Bank of Vietnam (SBV).
Dao Minh Tu, deputy governor of the State Bank of Vietnam at the meeting. Source: SBV.
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On September 16, the SBV cut the policy interest rate by 0.25 percentage points, a move Tu considered supportive to economic growth and liquidity of credit institutions.
According to Tu, a 25 basis-point cut at the moment send a strong message that the authority is willing to support enterprises’ operations, particularly in the remaining months of 2019.
Referring to the implementation of Resolution No.42, which provides special pilot treatment of bad debts at banks, Nguyen Trong Du, deputy chief inspector of the Banking Supervision Agency said a total of VND224.7 trillion (US$9.66 billion) in bad debts was resolved from August 15, 2017 to late June, 2019.
This helped bring the bad debt to 1.9% of total outstanding loans. If including bad debts at Vietnam Asset Management Company (VAMC), dubbed as the bad debt bank, and potential loan losses, the bad debt ratio would be around 5.2%, Du added.
In field of financial transactions, Du informed 78 banks in Vietnam are providing non-cash payment services and mobile payment is provided by 45 banks.
In the first seven months of 2019, the number of transactions via internet reached 226 million worth VND10,900 trillion (US$468.57 billion), up 51.8% in quantity and 18.3% in value year-on-year, respectively.
Additionally, the number of financial transactions via mobile phone stood at 202 million worth VND2,090 trillion (US$89.83 billion) during the period, up 104.9% in quantity and 155.3% in value year-on-year.
Regarding the process of restructuring the banking system, Du expected phase two of the process to be completed by 2021, which is currently on track with positive result. As of present, 11 banks have qualified for requirements on capital adequacy ratio (CAR) following Basel 2 standards, Du informed, saying more would be pushed to reach this standard from now on until the end of the year.
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