Banks have adjusted credit growth targets

	SBV adjusts credit growth targets for banks
	Banks race to raise charter capital
	Banks announced "huge" profit

Credit growth will affect the bank's profit at the end of the year. Photo: Internet

According to the SBV, the adjustment of credit growth targets for credit institutions is based on the latest ranking results according to Circular 52/2018/TT-NHNN, the operation situation of credit institutions in the country in 2022, market developments and orientation from the beginning of the year of the State Bank.

The SBV said that world inflation increased rapidly due to the escalation of prices of many goods and raw materials in the world stemming from the Russia-Ukraine conflict and the disruption of global supply chains. High inflationary pressure affects people's lives and the foundation of macroeconomic stability in many countries, prompting most major central banks in the world to take measures to accelerate progress. the process of tightening monetary policy, and raising interest rates to control inflation.

According to the World Bank (WB), Vietnam's credit-to-GDP ratio is among the highest in the world (by the end of 2021, this rate has reached 124%) which is a warning level for Vietnam about the risks of real estate investment and potential macro stability.

Since the beginning of 2022, the State Bank continued to assign credit growth targets to each credit institution in the direction of a credit growth rate of about 14% for the whole system, with appropriate adjustments to developments and actual situations; direct credit institutions to grow credit safely and effectively, directing credit to production and business fields, priority fields according to the Government's guidelines; strictly control credit in potentially risky areas; and create favorable conditions for people and businesses to access bank credit capital.

Credit growth over 2022. Chart: H.Due

Therefore, the State Bank has announced credit growth in 2022 for each credit institution on the basis of the results of rating each credit institution according to regulations, considering a number of factors to concretize policies and orientations run by the Government, the State Bank as a credit institution to assist in handling weak credit institutions; reducing lending interest rates to support businesses and people; credit in potentially risky areas.

According to the State Bank, by August 26, 2022, credit increased by 9.91% compared to the end of 2021, a high increase compared to the same period in recent years, in line with economic growth, supporting businesses and the economy which recovered positively in recent months. Credit structure focuses on production and business sectors, and priority areas.

The SBV said that the announcement and adjustment of the credit room for credit institutions will ensure that it contributes to controlling inflation, stabilizing the money market and encouraging credit institutions to improve their corporate governance business, safe operation, and contribute to a healthy banking system.

The SBV affirmed that it will continue to operate according to the proposed contents, create favorable conditions for people and businesses to access bank credit, and support the recovery of economic growth.

At the beginning of this year, the State Bank set a credit growth target of 14% for the whole year but did not deliver all the target of 14% but only allocated about 11.5% of the room.

According to FiinGroup's report, the rest (about 3.5%) will prioritize credit growth for banks based on three factors – having a high capital adequacy ratio; having a low lending rate to the real estate sector; having a low proportion of investment in corporate bonds and supports the SBV's activities in handling credit institutions, reducing loan interest for customers affected by the Covid-19 pandemic.

Currently, most banks have used up the allocated room, so the growth advantage at the end of the year will belong to the banks that are granted more credit room in this period. The banks that are forecast to open the room most are Vietcombank, MB, VPBank, HDBank, Sacombank, OCB, VIB, Techcombank, ABBank, TPBank.