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Credit growth expected to reach 13.61% in 2019
Monday,  10/7/2019, 09:42 

Credit growth expected to reach 13.61% in 2019

By Dung Nguyen

A person counts Vietnamese banknotes. Outstanding loans are expected to edge up by 4.85% in the fourth quarter and expand by 13.61% this year - PHOTO: THANH HOA

HCMC – Outstanding loans are expected to edge up by 4.85% in the fourth quarter and expand by 13.61% this year, according to a survey on business trends among credit institutions in September, recently released by the Monetary Statistics and Forecasting Department of the State Bank of Vietnam.

Many credit institutions believe the 2019 credit growth will fail to meet expectations set out early this year. However, this year’s business results are forecast to be better than those seen last year.

Credit institutions have frequently reduced the expected outstanding loan growth rate, dropping it from 15.27% to 13.61%, nearly equal to the credit growth target of the whole sector in 2019.

Apart from credit growth, capital mobilization in the banking sector is predicted to rise by 4.39% in the fourth quarter of 2019 and 13.06% this year, down 0.42 percentage point compared with the level previously expected.

The central bank’s recent report showed that as of September 26, credit growth was recorded at 8.64% and capital mobilization rose by 9.03% against the figures seen in early 2019.

Besides this, the survey indicated that business results were strong despite the expected slowdown in credit growth.

In late 2019, some 91% of credit institutions are forecast to see their pretax profit achieve positive growth versus 2018, whereas the pretax profit of 3% is expected to remain unchanged.

The credit institutions participating in the survey stated that their business performance in the third quarter had improved significantly, compared with the previous quarter.

Up to 82.3% of credit institutions expect their fourth-quarter business results to be better than those seen in the previous quarter, according to the survey.

Aside from this, the survey found that demand for loans will continue its upward spiral, higher than the demand for payments, cards and deposit accounts.

Accordingly, some 68%-73% of credit institutions expect the demand for banking services to surge for the rest of the year.

Bad debt settlement at commercial banks has improved, with 28.9% of financial institutions noting that the ratio of bad debts will plunge this quarter, according to the survey.

The survey also indicated that many banks saw a reduction in credit risk in the third quarter.

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