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Credit for securities, property posts highest growth in Vietnam

Credit for securities, property posts highest growth in Vietnam

Friday, May 05, 2023, 07:49 GMT+7
Credit for securities, property posts highest growth in Vietnam
Credit for securities and real estate businesses posted the highest growth in the first two months of this year over the end of last year. Photo: Tu Trung / Tuoi Tre

Credit flows into high-risk sectors, including securities and real estate businesses, reported the highest growth among economic sectors in Vietnam in the first two months of the year, according to the State Bank of Vietnam.

In particular, loans for securities and real estate businesses increased 6.45 and 13.39 percent, respectively, over the end of last year.

Local credit institutions had mobilized VND12,340 trillion (US$530.7 billion) as of the end of March, up 2.61 percent against the end of 2022 and 10.49 percent year on year.

The ample liquidity allowed local banks to offer capital for the economy.

The capital was prioritized for production and business and other priority sectors as required by the government, contributing to the country’s gross domestic product growth.

In particular, credit for agro-forestry-fishery, industry and construction, and services inched up 0.74, 1.79, and 0.5 percent, respectively, in January-February against the end of last year.

Small and medium enterprises, export, supporting industries, and hi-tech firms also saw a respective credit increase of 0.73, 3.15, 6.08, and 3.31 percent in the two-month period.

However, bank loans for agriculture and rural development edged down 0.09 percent.

Credit for risky sectors was still put under control.

The central bank attributed the low credit growth since early this year to the low capital demand, global economic volatility, and high inflation.

Some groups of customers with a demand for loans also failed to meet requirements or faced obstacles in procedure completion. 

The central bank estimated the ratio of bad debts, bad debts sold to the Vietnam Asset Management Company that remain unsettled, and loans posing a high risk of becoming bad debts of Vietnamese credit institutions to their total outstanding loans at five percent as of the end of February although the credit institutions reported the bad debt ratio at below three percent. 

It is needed to take potential bad debts into account to prevent them from becoming bad debts in the future, according to the State Bank of Vietnam.

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Thanh Ha - L.Thanh / Tuoi Tre News

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