Ho Chi Minh City: credit growth remains steady amid COVID-19 outbreak
Credit growth of banks in Ho Chi Minh City as of the end of May increased by 4.7% compared to the end of 2020.
The State Bank of Vietnam branch in Ho Chi Minh City has just announced the business data of the banking system in the area. Total capital mobilization of banks increased by 2% compared to the end of last year. Meanwhile, outstanding loans increased by 4.7%.
Specifically, it is estimated that the total capital mobilization of credit institutions in the area as of May 31, 2021 reach more than VND 2.96 million billion, increased by 2% compared to the end of 2020.
Regarding capital mobilization activities in the area, according to the State Bank Ho Chi Minh City branch, April 2021 had the highest growth rate compared to the first months of the year. It is estimated that in the first five months of 2021, capital mobilization growth at about 2%. The growth rate of capital mobilization in the first five months of 2021 is higher than the growth rate of the same period in 2020, but still lower than the previous years (2018 - 2019), mainly due to the negative impact of COVID-19 pandemic to the city's economic sectors.
While capital mobilization grew slowly, the total outstanding loans of credit institutions in the area as of May 31, 2021 (estimated data) reached over VND 2.65 million billion, increased by 4.7% compared to the end of 2020.
In which, outstanding loans in VND is estimated at nearly VND 2.5 million billion, accounting for about 93% and increased by 4.45% compared to the end of 2020. Outstanding loans in foreign currencies is estimated at VND 185 trillion, accounting for about 7% and increased by 8.06% compared to the end of 2020. By credit term, value of outstanding short-term loans is estimated at VND 1.22 million billion, while value of outstanding medium and long-term loans is estimated at VND 1.43 million billion.
The State Bank of Vietnam has also just issued a written request to credit institutions and branches of the State Bank in provinces and cities to urgently implement measures to strengthen the prevention, control and removal of difficulties caused by the negative impact of the COVID-19 pandemic. Accordingly, the State Bank requires credit institutions to minimize expenses in order to create financial resources to support customers, people and businesses.
Credit institutions need to calculate and reduce lending interest rates, restructure debt repayment terms and perform other support measures, based on their financial capacity. Measures and support interest rates must be made public for people and businesses to know.
The State Bank also requires banks to continue implementing support solutions for customers affected by the COVID-19 pandemic. Accordingly, activities of debt rescheduling, exemption and reduction of interest, fees, providing new loans, etc., according to their competence and as prescribed in Circular 01/2020, Circular No. 03/2021 amending supplementing Circular 01, and many other circulars and decisions on classification of assets, level of deduction, method of making provision for risks and use of provisions to handle risks in the operation of credit institutions. and amendments and supplements.
With the State Bank of Vietnam's branches in localities, besides directing credit institutions in the area to drastically implement solutions to remove difficulties according to regulations, it is necessary to closely inspect and supervise the implementation of guidelines and policies to support businesses and borrowers who have difficulty paying loans due to the COVID-19 pandemic.
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