The credit growth of the entire banking system is estimated at less than 10 percent in 2020 (Photo: VNA)

Hanoi (VNS/VNA) — Despite a credit slowdown in the firsthalf of 2020, some private commercial banks have still asked the State Bank ofVietnam (SBV) for a credit growth expansion to prepare for a peak lendingseason expected at the end of the year.

According to the SBV’s policy, it assigns an annual credit growth quota foreach bank depending on business performance and bad debt ratios to controllending of the entire banking system and ensure money supply and inflationcontrol as targeted by the Government.

The credit growth in the first half of this year is only half of the sameperiod of last year. SBV’s statistics showed banks’ mobilised capital increasedby 5.31 percent while loans grew only by 3.45 percent in the period.

However, banks said loans often increase sharply at the end of the year whencapital demands of both firms and individuals surge significantly to preparefor the country’s holidays and festivals.

According to finance expert Huynh Trung Minh, it is feasible for the SBV toloosen the credit growth limits for banks, but banks must ensure to lend toonly effective projects.

SBV has also recently expanded credit growth limits for some banks with healthybusiness performance to boost the country’s economic growth. Techcombank, VIB,VPBank, TPBank and Sacombank were approved to raise their credit growth limitsto 19-23 percent.

Despite the expansion, a report of BIDV Securities Company (BSC) estimated thecredit growth of the entire banking system this year would be only 9 percent,compared with the 13 percent rate in 2019.

Banks have been reducing the proportion of lending to individuals and small-and medium-sized enterprises (SMEs) while focusing on large-sized businesseswith good resistance against the COVID-19 pandemic, BSC noted.

Sharing the same view, Vietcombank Securities Company (VCBS) also said the SBVhad loosened credit growth limits for some banks, but the credit growth of theentire banking system would be less than 10 percent in 2020.

Analyst🔯s from Saigon Securities Incorporation (SSI) estimated an even lowerrate. SSI’s recent report on the outlook for the banking industry in the secondhalf of 2020, forecast credit growth in 2020 could be around 7.5-8.5 percent.According to them, the credit demand may continue to weaken as the countrystill suffered impacts of the pandemic while banks, especially large-sizedones, may not lower their cr✤edit granting standards./.