Credit surges 11.5% by end-October
Credit of the banking system by the end of October this year rose by 11.5% compared to the end of 2021, Bao Viet Securities Company (BVSC) said, citing data from the State Bank of Vietnam (SBV).
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| A Vietcombank transaction office in Hanoi. Credit will be allowed to expand by 2.5% in the last two months of 2022. (Photo: VNA) |
The monthly rate was the highest credit growth since 2018.
According to BVSC, if the SBV keeps its credit growth target at 14% for the whole year of 2022 as planned previously, credit will be allowed to expand by 2.5 percentage points in the last two months of this year.
BVSC forecast it is difficult for the SBV to extend the credit growth target to more than 14% this year, especially when inflation is posing higher risks with the consumer price index (CPI) in October recording 4.3%.
The SBV made the latest credit growth quota expansion for 15 banks in early September this year, of which Sacombank got a rise of 4%; Agribank, 3.5%; SHB, OCB and MBB, 3.2%; VIB, 3% and Vietcombank, 2.7%. It was the second time the SBV raised the credit cap for commercial banks in 2022.
The credit growth quota regime was officially deployed in 2011 when Vietnam’s economy was experiencing hyperinflation stemming from excessive money supply. The credit growth quota regime, putting a cap on the banking industry’s credit expansion, is often announced by the SBV at the beginning of each year. Based on the credit growth quota for the entire banking industry, the SBV will determine the credit growth for each commercial bank depending on its financial health, with indicators including capital, asset quality, governance, business performance results, liquidity and sensitivity to market risks.
On the interbank market, from October 27 to November 3, interbank interest rates for overnight and one-week terms continued to increase by 0.86% and 0.52% to 6.93% and 7.15% per year, respectively. Meanwhile, the two-week term interbank interest rate decreased by 0.66% to 6.98% per year.
With the SBV's net pumping in the second week in a row on the open market, BVSC believed interbank interest rates will cool down this week. However, it is likely that interbank interest rates will fluctuate around 5-7% until the end of the year, and be hard to cool down as strongly as at the beginning of this year.
(Source: VNA)
