SBV Governor says 12 per cent credit growth likely

December 31, 2013 | 17:00

(0) user say

Speaking at a conference to review banking sector activities in Ho Chi Minh City, State Bank Governor Nguyen Van Binh said that through December 27 credit grew by more than 11 per cent, compared to 9.5 per cent on December 22.

It is likely growth would reach the planned target of 12 per cent, added Binh.

He added that in total, the VAMC had bought VND36 trillion ($1.71 billion) in bad debts from credit institutions, contributing 1 per cent to credit growth. He said that if this number was calculated in, the annual target would have already been reached.

Binh continued by saying that credit growth in 2013 is commensurate with this year’s GDP, defending his point by calculating that for every 1 per cent of economic growth there should be 2 per cent credit growth. He said this was much better than previous years when credit growth hit 34-36 per cent while GDP was only 6-6.5 per cent.

Binh reiterated that the credit growth target for the banking sector next year was 12-14 per cent, and that credit institutions would be required to maintain high lending standards to ensure the health and safety of credit activities and the system as a whole.

The central bank will continue applying interest rate caps for VND deposits to stabilise market interest rates.

It had been estimated earlier in the year that credit growth would top off at around 9 per cent. As of December 12, credit had only grown 8.83 per cent, 3.17 per cent lower than the forecast, reported the State Bank.

By By Nguyen Trang

What the stars mean:

★ Poor ★ ★ Promising ★★★ Good ★★★★ Very good ★★★★★ Exceptional