The State Bank of Vietnam, the country’s central bank, has recommended that local lenders limit and keep a close eye on their lending to the real-estate and securities sectors amid recent reports of alarmingly rapid credit growth. Banks should avoid directing too much of their available credit toward the construction and property sectors, and should instead concentrate on mid- and long-term lending, the central bank said in a fiat. Local credit institutions are also advised to continuously review and assess the progress of realty projects and their developers’ financial health, particularly as it relates to their collateral assets, and have measures in place to handle any defaults. As for the consumer credit sector, the State Bank of Vietnam reminded banks to evaluate and process lending applications with scrutiny. Banks should monitor borrowers to ensure they refrain from using consumer credit for investment in property or stocks. The central bank also suggested that banks limit the pace of their stock market investment lending in order to minimize risk. As an alternative, commercial banks were asked to increase their lending to the manufacturing, production, and business sectors, particularly those areas in need of capital for growth, such as agriculture, export, supporting industries, and small- and medium-sized enterprises. This is not the first time the central bank has told local lenders to tighten the valve on credit meant for the real-estate and stock sectors. Loans made to businesses and individuals in these industries have been expanded at a pace so fast that the… [Read full story]
VietNamNet Bridge – Recently the State Bank of Viet Nam told credit institutions to restrict loans to real estate projects to reduce risks and credit concentration in a single sector. It said that reports from some credit institutions show that over the last few months they focused on lending for major property projects. A report from the central bank shows that in the first half of the year credit to the housing sector reached a total of VND415.44 trillion (over US$18 billion), up 32.92 per cent as compared with the figure recorded in early 2014, and 5.76 per cent up…... [read more]
Recently the State Bank of Việt Nam told credit institutions to restrict loans to real estate projects to reduce risks and credit concentration in a single sector. The central bank also advised the lenders to limit lending for new housing projects, especially luxury housing and resorts and those with low liquidity. It said that reports from some credit institutions show that over the last few months they focused on lending for major property projects. A report from the central bank shows that in the first half of the year credit to the housing sector reached a total of VNĐ415.44 trillion…... [read more]
Motorcyclists ride at a residential quarter in Hanoi. Photo credit: AFP Many banks have stepped up lending to the housing sector amid a revival in the market, bringing uncomfortable reminders of the property bubble that burst not too long ago. Techcombank and ACB are offering loans of up to 70 percent of an apartment’s value to buyers for 20-25 years. Vietcombank has set aside VND10 trillion (US$458.5 million) for lending to home buyers. As of May end outstanding loans to the property sector were 10.89 percent higher year-on-year, compared to an overall 5 percent credit rise for the banking sector,…... [read more]
Recently the State Bank of Viet Nam (SBV) told credit institutions to restrict loans to real estate projects to reduce risks and credit concentration in a single sector. The central bank also advised the lenders to limit lending for new housing projects, especially luxury housing and resorts and those with low liquidity. It said that reports from some credit institutions show that over the last few months they focused on lending for major property projects. A report from the central bank shows that in the first half of the year credit to the housing sector reached a total of VND415.44…... [read more]
Vietnam's National Assembly has still not decided on allowing foreign banks in the country to provide loans for stock investors as the issue has stirred up controversy at the 6th NA meeting session. The working group of the draft law insisted that foreign-owned banks and branches will be not allowed to lend stock investment as high risks may threaten the safety of the local banking system. The Economics Committee, however, said that the ban on stock lending of foreign banks will have negative impact on the local stock market as money inflows will be limited. In order to ensure the…... [read more]
