Banks work to get property moving

To this end, banks’ prime targets are real home-buyers and property projects with stable outputs.

Eximbank was step up personal lending, mainly targeting house purchases of individual customers albeit export is its core business area, said the bank’s general director Truong Van Phuoc.

Accordingly, Eximbank just rolled out VND5 trillion ($238 million) credit package to promote house purchases with stable 12 per cent per year lending rate in the first two years since the date of signing contract.

Lending amount is limited to 70 per cent of collateral value maximally in 15 year duration. After the first two years, the bank will set the interest rate at a level tantamount to 13-month deposit rate plus 2.5 per cent and customers would be flexible in loan repayment.

Property-oriented lending currently made up 4-5 per cent of the bank’s total outstanding loan balances, leaving a big room for the bank to drive up lending in this area, according to Phuoc.

In its case, property-oriented lending accounted for 20 per cent at Sacombank’s total outstanding loan balances at this time, according to the bank’s general director Phan Huy Khang. “The bank’s credit growth surpassed 9 per cent by late November 2012 and is expected to fetch around 12 per cent whole year of which medium and long-term loans occupy 20-21 per cent of total,” said Khang, adding that Sacombank would focus on lending feasible property projects and home purchases.

According to OCB’s deputy director Pham Linh, parallel to promoting property-oriented consumption, OCB lent to developers of feasible projects. In the recent past, the bank inked a VND80 billion ($3.8 million) credit package to help developer Nam Long Investment expedite Ehome 3’s apartment project and offers home buyers preferential lending with a 3 per cent discount rate.

At HD Bank, apart from supporting home buyers with 8.6 per cent interest rate in the first three months, the bank tries to boost lending through sourcing viable projects.  

BIDV set aside VND6 trillion ($285 million) to pump into the property sector of which VND2 trillion was to promote home purchases with a 12 per cent, per year lending rate in the first three months and VND4 trillion to be disbursed into property projects.

VIB offers VND1 trillion ($47.6 million) to lend home buyers with only 9.9 per cent per year lending rate in the first thee months.

“Current lending rates to house purchases are still high on tolerance of real home buyers as well as trading firms in this field,” said Ho Chi Minh City Real Estate Association chairman Le Hoang Chau.