The State Bank of Vietnam (SBV) said the credit structure was channelled into production and business sectors, especially the priority areas, in the first half of this year.
Ms Nguyen Thi Hong, deputy Governor of the SBV, said, credit outstanding rose 6.16 per cent in the year to May 31. Interest rates in some State-owned commercial banks and joint stock commercial banks declined by 0.5 per cent per annum.
Credit growth corresponded to macroeconomic development. The credit structure has shifted towards the business sector, especially the priority areas. Credit for the potentially risky areas was tightly controlled to ensure the system safety.
In early 2018, interest rates were kept stable, with lending rates for priority sectors keep falling. In particular, State-owned commercial banks and some joint stock commercial banks reduced interest rates by 0.5 per cent per annum for well-profiled customers. Lending rates are currently staying 69 per cent per annum for short terms and 911 per cent for longer terms.
For customers with high credit ratings, short-term lending rates ranged from 4-5 per cent per annum. By the end of March 2018, total bad debts accounted for 2.18 per cent of total outstanding loans. The system dealt with VND100.5 trillion of bad debts under Resolution 42 from August 15, 2017 to the end of March 2018.
The SBV said that restructuring at credit institutions continued to be accelerated. Commercial banks basically completed restructuring plans coupled with bad debt settlement schemes, which have been submitted to the SBV for approval. Restructuring plans focus on improving asset quality, credit quality control and bad debt settlement; strengthening financial capacity; expanding operating scales and networks, developing payment services and other non-credit services.
In the rest of 2018, the SBV will continue to conduct active, cautious and flexible monetary policy in close combination with fiscal and other macroeconomic policies to control inflation based on the fixed target, enhance the macroeconomic stability, support reasonable economic growth, ensure the liquidity of credit institutions, and strengthen monetary market and foreign exchange market.
In particular, the central bank will continue to flexibly manage open market operations in tune with market developments and liquidity availability of credit institutions to support monetary market stabilisation; and regulate interest rates based on macro balance, inflation and monetary market. Given inflation to be kept under the target level, stable market and favourable macroeconomic conditions, the SBV will utilise monetary policy tools in support of credit institutions to reduce deposit interest rates and provide favourable conditions for credit institutions to lower their lending interest rates.
The SBV will continue to operate flexible exchange rates based on market movements, macro balances and monetary factors; manage and control the credit scale elastically based on practical conditions to raise credit quality and facilitate capital access for businesses and people
At the same time, SBV will speed up credit institution restructuring, coordinate with relevant bodies to remove obstacles and difficulties in dealing with bad debts under Resolution 42, carry out measures to expand non-cash payment development, and ensure payment security and safety.
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