BVSC: Liquidity at several banks is showing signs of shrinking
According to BVSC's assessment, the overall liquidity of the banking system in 2021 will be less redundant than in 2020 when credit is recording a recovery.
In the recently published macroeconomic report of May 2021, Bao Viet Securities (BVSC) assessed that the liquidity of the banking system is basically still in a state of abundance when the State Bank still have not had to intervene through OMO channels and open market bills in recent months.
On the other hand, the analysis team also pointed out that liquidity at some banks may be showing signs of shrinking.
Specifically, in May, interbank interest rates of overnight, 1-week and 2-week terms increased simultaneously and exceeded 1% (between 1.24 and 1.41%). The current interest rate is already higher than the average level of 2020 (0.84 - 1.14%), but is still significantly lower than the level before the COVID-19 pandemic (average in 2019 with all three the above term types are higher than 3%).
"In general, we think that the liquidity of the banking system in 2021 will be less redundant than in 2020 when credit is recording a recovery," according to BVSC.
As of April 16, credit growth reached 3.34%, higher than 2% in the first five months of last year.
However, in the upcoming period, BVSC believes that the increase in credit will not be too "hot", enough to put pressure on interest rates in general in the market, when the State Bank of Vietnam applies credit limits to most banks at a lower level than the same period last year and the COVID-19 pandemic is complicated.
In addition, with inflation growth expected to continue at a low level in 2021, BVSC expects to remain low compared to 2019 and earlier.
- The SBV may continue to cut policy interest rates if GDP growth is negative in the third quarter
- Positive credit growth expectations
- VDSC: Credit growth is estimated at 9.5 - 10.5% by the end of the third quarter
- VCSC raises credit growth and NIM forecasts for banks in 2021
- Proposing 50% reduction of interbank electronic payment transaction fees until June 30, 2022
- Credit demand will gradually recover towards the end of the year
- Digital transformation accelarated in banks
- Free and reduced banking fees for all transactions
- Adjusting credit growth targets for banks
- The State Bank of Vietnam issued plan for implementation of the UKVFTA Agreement