Dang Quang Tien, deputy general director of Military Bank, said his bank reported a credit growth rate of around 7% in the first six months of this year. Explaining this positive result, Tien said the bank had launched multiple loan programs for a temporary rice stockpiling plan designed to spur prices, agricultural businesses, and small and medium-sized enterprises. This is also because lending rates have slid sharply against early this year.
Since June, enterprises in the five priority groups have enjoyed annual lending rates from 8-10% while other firms pay 10-12%. Long-term lending rates are from 11.5-14% a year and firms in the agriculture and rural sector enjoy rates of 7.5-10%.
Tien said earnings would be affected as the spread between deposit and lending rates was narrow. However, as most institutions have cut lending rates, the bank has had to follow suit to retain customers and foster credit growth.
Military Bank is seeking permission from the central bank to raise its credit growth quota to around 15% this year. It is not hard to achieve it as the bank has signed many credit contracts but have yet to disburse, Tien said.
Phan Huy Khang, general director of Sacombank, said the bank in the first six months achieved high credit growth against 2012′s first half. Sacombank has gained credit growth of 12%, the same as this year’s target of the entire system, and has asked for approval to raise the quota to 20%.
Khang said the strong credit growth had resulted from connectivity programs between banks and enterprises organized by HCMC’s government. Lending rates for corporate customers have slipped to less than 12% while rates for consumer loans have also been below 15%.
The head of the corporate customers department of a bank capitalized at nearly VND6 trillion said that it is offering rates of 9-12% depending on customers’ creditability. Those in the priority groups are subject to a rate of around 9.5%.
Customers with high creditability now have greater chance of taking out loans as most banks are trying to speed up credit growth, the banker said.
However, some banks are still struggling with lending operations. VietinBank reported credit growth of minus 3% in the first quarter and as of the end of the second quarter, credit grew around 1.5% versus late 2012, said VietinBank deputy general director Pham Huy Thong.
Nguyen Hoang Minh, deputy director of the central bank’s HCMC branch, said the city had seen credit growth of around 3.3% this year.
The central bank’s HCMC branch and some banks such as VietinBank, Eximbank, Sacombank, LienVietPostBank, DongABank and BIDV on Tuesday signed credit contracts to lend VND255 billion to enterprises and family-run businesses in District 11. The loans carry a rate of 9%.