HCMC banks ensure liquidity for Tet

Deputy director of the State Bank of Vietnam’s Ho Chi Minh City branch Nguyen Hoang Minh

How is the banks’ overall liquidity situation at this point of time?

The liquidity of city-based banks is fairly good at the moment.

In fact, albeit saving accounts rate lower than previously, banks still have ample sources of idle capital as other investment channels have proven less appealing.

How has the capital demand been improved?

The city’s credit expanded 1 per cent in January against the end of 2014. The demand for credit is expected to be much better this year when firms’ health will be gradually improved thanks to a warming economy.

Besides, increased capital demands for house purchases by private individuals will have positive impacts on the real estate market, helping banks to tackle bad debts more effectively.

Therefore, the credit growth target of 13-15 per cent set by the banking sector for this year is within reach, especially when firms’ borrowing costs are going down.

What are city-based banks major goals this year?

Last year, city-based banks reported upbeat business results. For example, a total of VND1,343 trillion ($62.7 billion) had been mobilised throughout the year, signifying a 14.8 per cent increase on-year. Outstanding loan balances reached VND1,067 trillion ($49.8 billion), growing by 12.1 per cent, while keeping a focus on government priority areas.

This year, the banking sector’s focal tasks will be accelerating the restructuring process and reforming the growth model, increasing efficiency in tackling bad debt and promoting credit growth, pushing up efforts to help firms remove difficulties through engaging in dialogue and bank-business networking programmes and further expanding and developing banking services.

Concrete targets for 2015 are a credit growth of 12-13 per cent, an increase of 11 per cent in deposit volumes and bad debts kept at levels below 3 per cent.

How will the city’s bank-business networking programme be handled this year?

Last year, the programme had spread throughout the city areas and generated practical effects. Consequently, more than VND40 trillion ($1.86 billion) was disbursed under the programme to over 1,140 businesses, co-operatives and family businesses, double the target set earlier that year.

This year, the programme envisages disbursing more than VND60 trillion ($2.8 billion) with interest rates between 5.5-7 per cent per year to short-term loans and at least 7 per cent per year to medium and long-term loans. Efforts will gear towards helping more firms get access to this lower-cost capital channel.