A customer makes transactions at a the Orient Commercial Joint Stock Bank (OCB) branch. — Photo thitruong.nld.com.vn

Many banks won’t be able to offer loans despite the high demand for capital before Tet as they have used up their credit quotas, said Dau tu Chung khoan newspaper.

The top official of a Ha Noi-based bank, on condition of anonymity, said that despite good liquidity preparation for the business season at the end of the year, his bank has used up the 20 per cent credit growth quota assigned by the central bank by November, so it cannot increase lending. The demand from both individual and corporate customers has risen in the fourth quarter, especially in December, as businesses need money to reserve goods for Tet and the demand for payment for imported goods is high.

“As we cannot get the central bank’s approval for increasing the lending quota for 2016, we must recover the existing debts to be able to grant new loans,” he said.

Many banks, especially the smaller ones, have very limited room left for giving more credit. Credit growth of the Orient Commercial Joint Stock Bank (OCB), for example, hit 21 per cent in the first half of the year while its lending quota for the entire year is only 25 per cent.

Chief of Vietcombank’s office in the southern region Huynh Song Hao said that the capital demand from both enterprises and individuals has increased at the end of this year partly due to the warming of the home loan segment. The gradual decline of lending interest rates has also created a favourable condition for taking loans.

Statistics from the State Bank of Viet Nam (SBV) showed that as of November 22, 2016, capital mobilisation has risen by 15.28 per cent compared to late 2015, while lending has shot up by 14.57 per cent, with dong loans rising 15.81 per cent.

Deputy director of SBV’s HCM City branch Nguyen Hoang Minh said that in HCM City alone, as home loans rose sharply in 2016, accounting for up to 40 per cent of the city’s total outstanding loans to individual customers, city-based banks’ lending grew fairly positively from this January to November, at 16.4 per cent.

While lending would grow fast at the end of the year, Minh noted that this year-end acceleration requires banks to strictly control their credit quality so as to limit the risk of bad debts.

Expert Can Van Luc said the credit growth target for the banking sector this year is reasonable and feasible. However, he said, bad debts remain one of the major barriers for lending, and banks must prioritise credit quality control over giving loans. — VNS