Analysts Wary of Vietnam Bank Credit Rise

Nguyen Th? Hong, deputy governor of the State Bank of Vietnam, said as of May end bank credit had grown at 6.58% in the year-to-date, an eight-year high, VNA reported. The rate in the same period had been 5% and 4.5% in 2016 and 2015. Many lenders such as ACB, Vietcombank, and LienVietPostBank have in fact reported growth rates of 8.3% to 11%. Explaining the steep growth, market observers said in recent months domestic enterprises’ credit demand might have been higher since their production and trading activities have gradually picked up pace after major festivals, including Tet. Circular No 39/2016/TT-NHNN which took effect in March, is one of the main reasons, they said. It allows credit institutions, including banks, to reschedule debts based on a careful assessment of whether a customer has the capacity to fully repay the loan principal and/or interest within the rescheduled period. Another important factor is the strong recovery by the real estate and stock markets.