Banks post rosy consumer lending performance by year-end despite COVID-19 threat

To fuel year-end demand, a slew of banks have relaxed lending rates to attract customers

Compared to the first half this year, many banks have seen their credit volume triple or quadruple in recent months.

For instance, Ho Chi Minh City-based commercial lender HDBank’s credit has expanded by more than 11 per cent in the first 11 months of this year. Meanwhile, Vietcombank – the largest bank in the system – has reported strong growth momentum in recent months after a setback in the early months of the year.

According to Vietcombank chairman Nghiem Xuan Thanh, by the end of November, the bank posted 10 per cent credit growth and was recently authorised by the central bank (SBV) to expand its credit by 14 per cent.

“Our bank’s full-year credit growth might reach 13-14 per cent this year,” Thanh said.

Not only Vietcombank, many banks in the system like TPBank, VPBank, or VIB have thus far seen credit expand by more than 20 per cent.

The coronavirus (COVID-19) pandemic being contained and the economy gradually rebounding are deemed as the key factors fuelling demand for capital for both firms and people.

In addition, Vietcombank's chairman unveiled that efforts to restructure customer segments and diversify lending portfolio have also contributed to boosting their credit growth.

The SBV's recent statistics show that the credit of the entire banking sector has expanded by 1.75 per cent in November 2020 alone, which was almost double the average monthly credit growth in the early months of the year.

If this upbeat growth is maintained, the sector’s credit expansion could surpass 10 per cent for the full-year.

The financial statements of listed banks show that the key enabler to drive banks’ credit in the first nine months of this year was corporate credit.

Accordingly, in the last two months, consumer loans and lending revenue from small- and medium-sized firms saw a sharp growth and became a new growth stimulator.

At Hanoi-based commercial lender Vietnam Maritime Bank (MSB), its profit in the last two months equalled to that in the entire third quarter which mainly came from lending activities.