Binh Duong has a high demand for using bank loans for production and business activities, thus credit growth in Q2-2018 was doubled, which was a good signal. Target for the banking sector in 2018 is a credit growth at 19-21%.
Good growth
The target for credit growth in 2018 is quite high to provincial banking sector in general and to each institution in particular, demands effective and drastic efforts of each unit. Therefore, after several months of quite quiet business activities in the first half of the year, since April, the situation have started to grow well, because of the application of solutions to simplifying loan application procedure; intensifying consultancy activities; assisting clients in developing effective projects and plans as a basis for lending; focusing on credit quality control to ensure capital adequacy.
Due to the early implementation of effective solutions, banking system in Binh Duong province increases outstanding loans in comparison with the first quarter. In photo: Mobilizing deposits at Binh Duong HDBank.
Do Thi Mai Tuyen, Director of AgriBank - Binh Duong branch, said that in 2017, the bank branch actively applied solutions to create good results in the first two quarters. The focus was on agricultural and rural development, facilitating farmers, cooperatives, farms and businesses with a policy of preferential interest rates to stimulate production of agricultural products, home-craft industry for export.
To Vietcombank - Binh Duong branch, the goal of continuing to create sustainable increase of loan outstanding balance was identified by the bank leaders with drastic solutions to grow stronger in 2018. According to Nguyen Thai Minh Quang, Director of Vietcombank - Binh Duong branch, up to June, total loans and total deposits of the bank increased about 6% compared with the beginning of 2018.
According to the State Bank of Vietnam (SBV) - Binh Duong Branch, since April, non-state commercial banks have been operated quite well. As a result, Q2's total loans were better than the previous year. Most of commercial joint stock banks in the province such as Sacombank, ACB, or foreign banks, like Shinhan Song Than Bank, had increasing total loans. This made credit growth to be a good direction.
Capital poured into production and business
According to report of SBV-Binh Duong branch, as of June 1, total loans were estimated to increase 7.44% over the beginning of 2018. Accordingly, credit institutions lent VND162,087 billion, an increase of 15.99% year-on-year. Vo Dinh Phong, Director of SBV-Binh Duong branch, said that total loans of credit institutions in the first 6 months increased slightly compared to the beginning of the year and a high increase over the same period of 2017. This confirmed that loan growth has been stable. In particular, short-term loans accounted for a high proportion of total loans (54.97%). However, medium and long-term loan growth was higher (up 16.60% y/y) and over short-term loans; thereby, contributing to improving and expanding production and business activities, creating a driving force for local economic growth.
To closely follow the province's key economic development program, focusing on big business clients, small and medium enterprises, business households, BIDV – Binh Duong branch also reached a credit growth of 8% y/y. According to Tran Ngoc Linh, Director of BIDV-Binh Duong Branch, with a growth rate of nearly 50% in the first 6 months, after a period of increasing the supply of credit products to suit enterprise needs, short-term interest rates at 6-8% per year, medium and long term at 9%, resulting in an increase in total loans. In addition, the demand for retail loans for individuals is increasing rapidly, showing that credit growth could exceed 18% target set by BIDV Vietnam.
Although the growth of total loans in the first 6 months 2018 was satisfactory, according to the assessment of SBV - Binh Duong branch, this growth target is still being monitored by SBV. The most important thing is the ability to absorb effectively loans, the right subjects. Therefore, to reach the goal of increasing total loans by 19-21%, SBV - Binh Duong branch is instructing credit institutions to make greater efforts to reach customers, gather capital in production and business, and tighten credit to potential-risk areas. In addition, it will continue to bring into play high lending results to lending programs under the Central and provincial documents in order to improve business environment, improving the credit quality to reduce bad debts... continue to create a solid momentum for credit growth target 19-21% this year.
Reported by Thanh Hong – Translated by Ngoc Huynh
