Although the State Bank of Vietnam (SBV) is targeting to limit credit growth to 14 percent this year, six out of 22 banks that have published their nine-month financial statements have already passed this limit, with four exceeding 20 percent.

Based on the financial reports, banks with the highest credit growth are mostly mid-sized lenders. Techcombank and VIB led the industry with credit growths of above 28 percent each, followed by TPBank with 20.4 percent, and VPBank and HDBank at over 14 percent.

Meanwhile, credit growth is far lower at large state-owned lenders Vietcombank (12 percent), BIDV (8.8 percent) and VietinBank (4 percent), but their outstanding loans are 3-4 times the size of the average mid-sized lender, and these banks are also the top three in terms of total assets.

As a result, increasing numbers of customers have been complaining in recent weeks that they were having difficulties obtaining loans from some commercial banks. Credit officers at these banks explain that they have been ordered to stop lending because the bank has already reached its credit growth ceiling.

A bank representative who did not want to be named told VnExpress that they need to wait for the SBV to extend its credit limit in order to begin lending. This could take a week, the representative said.

"We still have some room, albeit very little, to lend as borrowers repay our loans, so we have to wait for the SBV to extend our credit ceiling before lending again. In the meantime, the bank will allocate disbursement based on the priority of each customer segment," he said.

Pham Chi Quang, deputy head of Monetary Policy at the SBV, said the central bank does not review the credit ceilings of commercial banks on a regular basis. Rather, it is carried out based on the proposal of each bank, he said.

No cause for concern

"The fact that some banks are reporting significantly higher credit growth than the average is no cause for concern, because banks differ in management and financial capabilities. The problem is not the volume of credit or credit growth, but the quality of credit," banking expert Bui Quang Tin told local media.

Echoing this, Dr. Can Van Luc, chief economist at BIDV, said: "High credit growth is only seen in small or mid-sized banks, so the amount of money flowing into the economy is not that high."

Credit growth of the banking sector as a whole is expected to slow down this year. According to latest SBV figures, in the first nine months of 2019, credit growth across the whole banking sector was 8.4 percent, well short of the central bank’s target of 14 percent.

BIDV Securities, a subsidiary of Vietnam’s biggest lender by assets, forecast that credit growth would only hit 12-13 percent by the end of the year, while MB Securities expects growth to reach 12.5 percent at most, lower than the 14 percent figure in 2018.

According to BIDV Securities, credit growth is forecast to slow down in 2019 mainly because of reduced demand in many key sectors like real estate, construction and steel, in addition to lower demand for consumer credit.

Enterprises, especially those in the real estate sector, have been moving to bonds to raise capital after the SBV tightened lending for real estate to divert credit into more "priority areas" such as processing and manufacturing.

Last year, Vietnam recorded credit growth of 14 percent, the lowest rate since 2014.