The bank has announced an increase in the credit growth target for 2024 for credit institutions, based on clear and transparent guidelines without requests from financial institutions.

In an earlier statement, the bank allowed credit institutions that have reached 80% of the credit growth target for 2024, as set by the bank, to increase their credit limits based on their credit rating scores from August 28. This adjustment was introduced in late August, when credit growth in the system was only 6.63% compared to the end of 2023, well below the target set at the beginning of this year.

Credit growth among institutions has been uneven, with some banks experiencing low or even negative growth, while others closely met the SBV’s target. Banks such as ACB, HDB, LPB, and TCB, which achieved more than 80% of their targets, saw their credit limits raised to 18-18.7% in the August adjustment.

Experts from Military Bank Securities (MBS) noted that large-scale commercial banks are leading credit growth in the system, while State-owned banks have seen slower growth due to a surge in advance payments, driven by lower interest rates. Some banks, including VPB, MBB, TCB, and HDB, may sacrifice profits by reducing lending rates. However, MBS forecasts credit growth will reach 14% by 2024, assuming GDP growth of 6.5% for the year.

As of November, credit growth for the economy had increased by just over 11%, while the available credit room for the year is expected to range between 14-15%. This suggests that there is still significant room for credit growth in the final month of the year. The SBV’s continued increase in credit limits indicates that growth is becoming increasingly uneven among banks, with not all institutions able to expand credit. Analysts believe this move is intended to ensure the system as a whole meets the 15% credit growth target for the year.

Alongside increasing the credit room, the SBV has instructed credit institutions to implement the Government's and bank’s directions, focusing on improving business efficiency, ensuring system safety, and easing access to credit for businesses and inpiduals.

Recently, the Prime Minister has sent an official dispatch to the SBV Governor, urging the swift implementation of effective and timely credit solutions in response to macro-economic developments, inflation, and the capital needs of the economy.

The credit growth target for 2024 remains 15%, according to the dispatch. The SBV was also tasked with continuing to implement measures to reduce lending interest rates.

Following the Government's guidelines, the SBV has issued a document on stabilising deposit rates and reducing lending rates. It asked credit institutions to maintain stable and reasonable deposit interest rates that align with their capital balancing capacity, credit expansion ability, and risk management, helping stabilise the monetary market and interest rate levels.

Dr. Nguyen Tri Hieu, a financial and banking expert, predicted that lending rates will decrease by approximately 0.5% in the rest of the year. However, he noted that any reduction in rates will depend on the cost of funds for banks, explaining that bad debts will be a hinder for the efforts. Despite this, Dr. Hieu believed the 15% credit growth target for the year is achievable./.