Unpaid loans are benefiting from economic recovery

>> Banks are optimistic about 2022 profit outlook
>> BEV encourages you not to relax the conditions for granting credits
>> Approximately US $ 6.6 billion remitted to Ho Chi Minh City in 2021

According to Dao Minh Tu, Deputy Governor of the State Bank of Vietnam (BEV), loan balances in the first month of this year increased by 2.74% compared to the end of 2021. “This is an increase of 16.32% compared to the same period last year, well above the 0.53% level recorded in January 2021.”, He said. In addition, this shows the resilience of the enterprise after the epidemic.

Bank credit growth is projected to be 14% this year.

Photo: VNA / CVN

According to Nguyên Dinh Tùng, Managing Director of the Orient Commercial Bank (OCB), lending balances recovered again in the fourth quarter of 2021, when capital demand increased. The government plans to launch economic stimulus measures to support credit development in 2022 and potential credit growth in the first quarter. For the full year, this rate is planned to be 14%.

Flexible monetary policy

According to BEV, this year’s monetary policy will be flexible to support economic recovery while focusing on controlling inflation and stabilizing macroeconomics. It encourages credit institutions to save costs in order to lower interest rates on loans and strive to support production, business units and priority areas in accordance with government policy.

Central banks are calling on lenders to have tighter control over foreign currency lending and lending in high-risk sectors, rather than relaxing credit approval terms. It encouraged creditors to lower loan interest rates and further reduce costs in order to prioritize credit for priority activities defined by the production sector and government.

The BEV said it is developing flexible monetary policy that is tightly integrated with fiscal and other macroeconomic policies to facilitate economic recovery. Given the potential for COVID-19 outbreaks, she urged banks to accelerate digital transformation, modernize payments and operating systems, and encourage the use of contactless transactions. rice field. Following the recently approved project on creditor restructuring and non-performing loans from 2021 to 2025, the central bank has taken better steps to restructure and manage non-performing loans to ensure the safety of banks. I asked the lender to take it.

Bright outlook for banks

Vietnam’s retail banking segment is becoming more and more targeted and has great potential. Photo :: VNA / CVN

Many banks, optimistic about the outlook for economic recovery, are aiming for growth of at least 20-30% this year, relying primarily on personal and mortgages. GDP growth of 6-7%, improved immunization, positive export growth, and outlook for future socio-economic recovery and development programs are precursors to bank earnings growth in 2022.

For Dr.. Cân Van Luc, a member of the National Monetary Policy Advisory Board and Chief Economist of the Bank for Investment and Development of Vietnam (BIDV), will support the growth of the banking sector this year with a socio-economic recovery and development program. Meanwhile, Thinh Vuong Joint-Stock Commercial Bank (VPBank) expects banks to reach an average profit growth rate of 30-35% over the next five years.

Similarly, the International Bank of Vietnam (VIB) has set an annual profit growth target of 30% or more over the next five years. Some analysts believe that banks with the benefits of credit lines, high capital adequacy ratios (CAR), large non-performing loan coverage, dynamic operating models, and large digital ecosystems will maintain high growth rates. I am.

Economic recovery will open up many growth opportunities, especially in consumer credit.It also “”battlefield“” A place where banks compete fiercely. Trân Thu Huong, VIB’s Strategic Director and Head of Retail Banking, said the agency will continue to set the goal of strong growth in the retail segment in 2022. Meanwhile, VPBank officials are optimistic that in 2022, all strategic segments of banks, including consumer credit and small business credit, will return to growth. Mortgages will be increasingly valued by many banks, especially in the retail sector.

Vietnam’s retail banking segment, on the other hand, is receiving more and more attention and has great potential for development, according to Dragon Capital’s assessment. The transition to retail, on the other hand, improves profit margins and provides banks with a more stable source of income.