Four commercial banks have credit growth cap lifted

The State Bank of Vietnam on Thursday extended the credit growth limit for four commercial banks VPBank, HDBank, MB and Vietcombank, according to top broker VNDirect Securities.

These are banks that have participated in restructuring weak financial institutions according to the State Bank's policy, the brokerage house notes in a report.

Specifically, VPBank's credit growth limit was lifted by 11.5 percentage points to 27.2% for this year, higher than last year's 20.2%.

HDBank had its figure raised by 5.1 percentage points to 23.5%. The tallies for MBBank were 5% and 23.2%.

Vietcombank saw its credit growth cap lifted by only 0.9 percentage points to 18.6%.

These are also the four banks with the highest credit growth limits to date, while the remaining banks have been granted a limit of 10-15% for this year.

This means VPBank is allowed to lend an additional VND45 trillion ($1.88 billion), MBBank VND20 trillion, HDBank VND11 trillion and Vietcombank VND9 trillion.

According to VNDirect, after this adjustment, about VND83.5 trillion ($3.5 billion) will be added to the national economy. Currently, the credit growth limit of 18 banks, which account for about 80% of the banking system's credit, is about 13.6% on average.

Previously, 18 commercial banks that account for 80% of the Vietnamese banking system's credit had seen their credit growth cap for this year lifted by between 0.7 and four percentage points, according to VNDirect.

As a result, the 18 banks can lend up to VND9,375,477 billion ($395.7 billion) in 2022, versus VND8,320,189 billion last year.

The central bank had insisted on maintaining a credit growth cap of 14% for the whole banking sector this year, saying commercial banks’ suggestion of increasing it to 15-16% was risky.

According to the latest State Bank data, as of July, total credit in Vietnam had reached VND11,440,719 billion ($482.83 billion), up by 9.55% over end-2021.

The credit included VND855,353 billion for agriculture, up by 7.31%; VND3,082,596 billion for industry and construction, up by 7.42%; VND3,000,392 billion for service, transportation, and telecommunications sectors, up 9.17%; and VND4,472,376 billion for other activities, up 11.81%.