Vietnam banks stop offering new property loans

Most Vietnamese banks have started to stop offering new property loans since early 2011 so far in the context of soaring bad debts from real estate sector together with squeezing liquidity of many banks, the local newspaper Thoi Bao Kinh Te Saigon (Saigon Economic Times) reported.
So far, almost all banks are no longer providing new real estate loans.

Truong Van Phuoc, Vietnam Export Import Commercial Joint Stock Bank (Eximbank-EIB)’s general director, has said that his bank’s credit line for real estate sector has been used up.

Currently, Eximbank can offer loans for four categories as specified by the State Bank of Vietnam (SBV) only, which were excluded from non-production category such as loans for building houses for low income earners, workers and house for living purpose.

Meanwhile, the lender does not prioritise lending to build apartment buildings or offices for lease.

An unnamed staff of Vietnam Commercial Joint Stock Bank for Foreign Trade (Vietcombank-VCB)’s HCM City branch also said that currently it only disburses funds for previously-committed projects and stops lending new projects.

Tran Anh Tuan, Nam A Commercial Joint Stock Bank (NamA Bank)’s general director also affirmed that his bank has built a roadmap to collect debts from real estate companies and will strictly carry out this plan in 2012.

Besides, the lender has no intention to disburse new funds for new real estate projects as the bank’s capital sources are limited and the real estate market presently shows no sign of recovery.

Sharing the same opinion, Trinh Van Tuan, CEO of Orient Commercial Joint Stock Bank (OCB), said that it is not the right time to lend to real estate firms. Presently, his bank is still continuing to lend previously-signed loans and stops new realty loans. – Vietbiz24

Tags: Vietnam banking industry, Vietnam finance, Vietnam financial

Posted by VBN on Feb 10 2012. Filed under Banking-Finance, Real Estate. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry