Banks stay calm about credit tightening

Several banks have played down the significance of the government’s recent resolution to reduce credit growth and money supply, saying the move would not affect their operations.
In September, the government required the total money supply and credit growth to be kept at 12 percent and 15 percent – 17 percent respectively, which means a contraction of 3 percentage points.
A banker in Ho Chi Minh City’s District 1 said credit growth at his bank was zero as of end-September and it now focused more on collecting debts instead. In addition, deposits at his bank have dwindled by 10 percent since September 7.
Finding good corporate clients is not easy these days as they have many options, said Tran Phuong Binh, general director of Dong A Commercial Bank.
Loans towards the year-end are mainly for old clients, he said. An Binh Bank also finds it hard to achieve a credit growth of 20 percent this year as the lending rate is still high, said general director Tran Thanh Hoa.
The bank has tried to cut the non-productive loan ratio down to 16 percent as required by the central bank. But the cut of 3 percentage points in credit supply does not have much impact on banks, Hoa said.
The money flow needs to be reconsidered to be in tune with the economy’s absorption capacity, otherwise it may cause inflation, she said. A well-known stock expert also said the government’s move was merely a response to the market condition.
Fiachra Mac Cana from HCM City Securities Co. said the government’s adjustment is not a tightening policy but a move reflecting the real growth rate from the beginning of the year.
“Credit growth to date is around 8 percent – 9 percent only, so the new target still allows generous room for expansion between now and the year-end,” he said. – Source:Vietbiz24.com.

Tags: credit tightening, Vietnam banking industry, Vietnam credit tightening, Vietnam finance, Vietnam financial

Posted by quynhdn on Oct 3 2011. Filed under Banking-Finance. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry