Analysts said the market was rather surprised at this high growth since banks had always seen negative credit growth in the first quarter since 2011. — Photo vtv

HCM CITY (Biz Hub) — Banking credit grew by 1.5 per cent in the first quarter, the State Bank of Viet Nam has reported.

Analysts said the market was rather surprised at this high growth since banks had always seen negative credit growth in the first quarter since 2011.

But they called it a reasonable outcome since the entire economy had seen a significant recovery.

Vu Dinh Anh, a senior economist, said the growth was a good sign especially since the economy still relied on credit.

Domestic firms seem to have regained confidence, with the number of companies established increasing during the quarter and many others also hiking their chartered capital.

Dinh Duc Quang, deputy director of lender OCB, told Dau Tu Chung Khoan magazine that the credit growth was due to real demand for capital and so sustainable. He contrasted that with similar strong growth in the final part of the year, which was however owed to banks looking for a way to increase lending to achieve their targets rather than demand.

Vo Tri Thanh, deputy director of the Central Institute of Economic Management, said, "Companies will likely have greater opportunity to do business because of reasons like high consumer demand and GDP growth.

"In the last four years consumer growth stood at only around 5 per cent. But [it] reached 9 per cent in the first quarter of this year, while the country's gross domestic product jumped by 6.03 per cent."

Acknowledging the strong revival in the economy, many banks had managed to expand their credit activities, analysts said.

The Viet Nam International Bank, which has been set a mere 11 per cent growth target by the SBV – this would see its outstanding loans increase to VND42.38 trillion (US$1.97 million) – plans however to achieve 27 per cent growth to VND48.53 trillion ($22.57 million) based on its capacity.

Nguyen Duc Huong, vice president of Lien VietPostBank, said the bank encouraged its employees to identify feasible projects to invest in to achieve the year's credit growth target of 13 per cent.

Some others like VietinBank, VCB, BIDV, and MBB have targeted credit growth of 16-17 per cent. — VNS