Banks poised for year-end hiking capital demands

Banks thereby said they expect they could scale up lending in year-end period to achieve the year’s projections. 

At Ho Chi Minh City-based Nam A Bank, lending rates to customers with viable business plans and good finance are ranging from 9-10 per cent, per year.

The bank’s credit expanded 12 per cent in the year’s first half and Nam A Bank has proposed the State Bank for easing the bank’s credit growth cap to 30 per cent to meet firms’ higher capital demands by year-end period.

At Eximbank, lending rates to export, production and trading areas are trending downward, even sliding to below 7 per cent per year to good customers.

The bank reported 5.7 per cent credit growth in the first seven months and will bolster capital support to firms and individual customers in later months to reach full-year set target of 12 per cent, according to Eximbank’s general director Le Hung Dung.

VP Bank is coming up with diverse concessionary credit packages in favour of businesses, particularly small and medium-size units.

For instance, its VND2 trillion ($95.2 million) credit package, going until end of September 2013, features lending rates from 7-8 per cent, per year which are 2-3 per cent lower than usual.

VPBank also roll-outs VND1 trillion ($47.6 million) credit package with 6 per cent, per year lending rate in the first six months to individual customers for car purchases. Lending amounts must be at least VND200 million ($9,500).

According to general director Nguyen Dinh Tung at Ho Chi Minh City-based Orient Commercial Bank (OCB), the bank’s credit growth surpassed 6 per cent in the first six months of 2013 and it may apply for higher credit growth in later part of the year to boost lending. In early 2013, OCB was allocated around 9 per cent credit growth target for this year by the State Bank.

Apart from NamA Bank and OCB, a number of banks like HD Bank and SeABank also wanted higher credit growth and their proposals were accepted by the SBV. Banks also executed cost-saving measures striving to curtail lending rates to boost credit growth.

Senior economist Dinh The Hien said low credit growth was inevitable amid flat-lining property market and sinking consumption.

“Industrial production will be continually bogged down in difficulties in late 2013, but it will further receive huge credit flows and begin to revive from mid-next year. Construction and property would slightly rebound only due to limited capital. As for trade and services, these sectors would gradually get back on track in later months of 2013 and enjoy faster growth from next year thanks to good capital infusion and lower lending rates,” Hien commented.