Banks await higher credit growth quota

A customer at an MB branch. MB may be able to expand its credit growth room to 30-35 per cent. —Photo vncb.vn

HÀ NỘI — Commercial banks are expecting to have higher credit growth limits in Q2 2022 as they have already used up most of their assigned quota this year.

Under the current regulations, the State Bank of Việt Nam (SBV) sets credit growth limits for each commercial bank at the beginning of the year depending on the bank’s health, including capital adequacy ratio, financial strength, risk governance and operational status. This was done to control credit growth of the entire banking system and to ensure money supply and inflation control as targeted by the Government.

Chairman of Vietcombank Phạm Quang Dũng said Vietcombank’s credit growth reached 8.8 per cent by April 29 while Vietcombank was granted a 10 per cent credit growth quota.

At Military Bank (MB), CEO Lưu Trung Thái also revealed that the bank has been assigned a credit growth target of 15 per cent so he expected the quota to be further extended in the near future.

According to Bảo Việt Securities (BVSC), MB has almost reached the assigned credit growth quota as the bank’s credit growth by the end of Q1 2022 reached 14.8 per cent. MB therefore is waiting for a SBV’s approval of a higher credit quota.

Meanwhile, ACB’s officials said they had applied to the SBV for an additional credit quota and hoped to have it to be approved by the end of June or at the beginning of July this year to have more room for lending.

By the end of Q1 2022, ACB’s total outstanding loans reached VNĐ380 trillion, up 5 per cent compared to the beginning of 2022. In the first four months of the year, the bank’s credit increased 8 per cent compared to the beginning of this year, mainly from short-term lending to strategic customer segments including individuals, and small- and medium-sized enterprises.

Experts forecast credit growth in 2022 will be higher than last year when the economy begins to recover after the pandemic. Therefore, banks will also be granted higher credit quota to facilitate loan expansion.

Especially, they said, banks such as Vietcombank and MB, which participate in restructuring weak credit institutions according to the Government’s directions, will have the opportunity to get the highest credit quota.

BVSC forecast MB may be able to expand its credit growth room to 30-35 per cent while the rise for Vietcombank will be 16 per cent.

According to the SBV, credit growth of the entire banking system at the end of Q1 2022 reached 5.04 per cent, 2.3 times higher than the same period last year.

SBV Deputy Governor Đào Minh Tú said the surge showed the economy has positive signs and the daily life, production and business of people and firms have also returned to normal thanks to the Government’s effective measures against the pandemic.

The credit growth target of the entire banking system in 2022 that the SBV set at the beginning of this year was 14 per cent. However, the SBV said the target can be adjusted up or down at the end of the year, depending on the actual situation, to ensure it meet targets of macro-monetary policies and inflation control. — VNS