A branch of PVcomBank in HCM City’s District 3. VNS Photo Bồ Xuân Hiệp

HCM CITY — The State Bank of Vietnam (SBV) has announced it will adjust the growth targets among credit institutions as a result of uneven credit growth.

In a report released on Wednesday, the SBV raised concerns over the uneven distribution of credit growth, with some banks having high levels of growth while others have reported low growth or even contractions in credit. 

As a result, the SBV will keep the year's credit growth target at 14.5 per cent, but will adjust the credit limit s for certain banks based on their growth from the beginning of the year.

As of November 22, overall credit growth has been only 8.21 per cent of the 14.5 per cent target, according to a report by SBV. 

Credit institutions that have achieved 80 per cent growth will receive additional credit limit s based on their 2022 ranking. 

Banks that prioritise credit for priority sectors and have lowered interest rates will also be eligible for additional credit limit s from the central bank. 

The additional credit limit  will be decided by the central bank, so credit institutions will not need to request or apply for additional credit, said the report.

As of the end of the third quarter, state-owned banks such as Vietcombank, BIDV, and VietinBank reported credit growth rates of 4 per cent and 9 per cent, respectively. 

In contrast, private banks such as VPBank and MB showed significantly higher growth rates.

VPBank’s outstanding loans at the end of the third quarter were over VNĐ454 trillion, up 26 per cent from the beginning of the year. 

MB’s customer loans reached over VNĐ500 trillion, up 16 per cent. 

Other private banks, including Techcombank, LPB, HDBank, and SHB, also reported credit growth of over 10 per cent.

The SBV has ordered commercial banks to provide “safe and healthy” credit and support enterprises to ensure credit growth is aligned with their risk management capabilities.

The central bank also said it will continue to monitor market developments closely and be prepared to provide timely, appropriate, and proactive additional credit limit s to support liquidity. 

Prime Minister Phạm Minh Chính, speaking at a recent meeting, asked the SBV to ensure a sufficient supply of capital for the economy and to report back to him by the end of December. 

"The central bank must carry out a comprehensive evaluation of the results of credit granting for the entire economy to apply timely and efficient measures that are feasible and will ensure adequate capital for the economy's safety and the stability of the banking system," said the PM.

The credit growth target for 2023 may not be achieved, particularly in the context of the low capital absorption rate of businesses and the entire economy, experts warned.

Meanwhile, money is still flowing into banks due to deposits being seen as the safest channel for cash holders, they noted.

Despite low deposit rates of below 6 per cent per year, deposits at banks reached a record high of more than VNĐ6.44 quadrillion as of the end of September. 

Due to the impact of a slowing economy, banks find it more challenging to increase credit growth.

Most banks said the credit standard could not be lowered in order to ensure system safety and prevent bad debt from increasing again.