Property lending cooled to guard against inflation

April 05, 2011 | 11:35

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Access to property-oriented loans is being ring fenced as banks attempt to limit lending to non-productive sectors.

OCB’s general director Trinh Van Tuan said lending to non-productive areas accounted for 35 per cent of the bank’s total outstanding loans by end of March 2011.

With consumer real estate loans taking the majority.

According to Tuan, OCB embraced lending restructuring and halted lending for securities and property mortgages.

A Ho Chi Minh City banking chief said it was almost impossible for the bank to bring down the lending rate to non-productive areas to 22 per cent by end of June, 2011 as required by central bank since loans to non-productive areas remained high at 44 per cent of total loans at the bank.

According to State Bank’s Directive 01/CT-NHNN dated March 1, 2011 banks having the rate of outstanding loans to non-productive areas of over 25 per cent must bring down the rate to 22 per cent not later than June 30, 2011.

DongA Bank’s general director Tran Phuong Binh said banks would find it arduous to increase lending to individual customers this year on the heels of central bank’s commitment to restricting property-oriented credit sources because property credit constitutes a big proportion in individual outstanding loans.

Lending to property sector remained low at around 10 per cent of total outstanding loans at Sacombank, according to its chairman Dang Van Thanh.

However, the bank is restructuring lending and prioritising giving loans to highly feasible property projects only in light of central bank’s commitment to spotlighting production and trading activities.

Sacombank also convinced part of its customers to delay implementation of property projects to 2012 waiting for market improvements, said the bank executive.

By Thuy Vinh

vir.com.vn

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