Major banks to discuss credit crunch with property developers

By Nguyen Thoan, Huong Dung
Thu, February 9, 2023 | 12:24 pm GMT+7

Representatives of state-owned commercial banks Vietcombank and VietinBank have said they will work with real estate developers to resolve difficulties they are facing.

The duo are among the "Big 4" banks, together with wholly state-run Agribank and state-controlled BIDV.

At a meeting on real estate credit on Wednesday, after listening to major developers such as Vinhomes, Novaland and Sun Group sharing recent difficulties related to cash flow and capital mobilization, the representatives confirmed that the banking sector has spent a significant part of its credit balance on real estate for both corporate and individual customers.

They cited State Bank of Vietnam (SBV) data that shows that loans for real estate were valued at VND2.58 quadrillion ($109 billion) as of December 31, 2022, up 24.27% year-on-year and accounting for 21.2% of the entire economy’s total outstanding credit.

A Vietcombank transaction office. Photo courtersy of VietnamBiz.

A Vietcombank transaction office. Photo courtersy of VietnamBiz.

According to Vietcombank CEO Nguyen Thanh Tung, real estate credit currently accounts for more than 20% of the bank’s total outstanding loans. In 2022, its loans for property increased by 17%, focusing on feasible projects and people with real needs.

At Vietcombank, outstanding real estate loans for individuals make up 90%, while the remainder belongs to corporate customers.

"We have also been focusing on industrial real estate credit, with the 2022 balance four times higher than 2021," he said.

In 2023, Vietcombank will continue to give priority to industrial park and export processing zone development. The creditor will also design new and more open policies for resort real estate as this segment is recovering after the pandemic.

"Basically, Vietcombank will only give loans to reputable businesses," he noted.

Tung admitted that banks now face great pressure as they must ensure system safety, meet SBV rules and comply with international standards, while still ensuring sufficient capital supply for the economy.

"The government and regulators need to help the corporate bond market to develop safely and effectively to reduce the burden of providing capital for the economy on the shoulders of banks."

Regarding interest rates, Tung said that before the meeting, state-owned commercial banks agreed that in 2023 they will try to cut deposit interest rates, thereby reducing lending interest rates to support businesses and the economy.

Nguyen Hoang Dung, acting CEO of VietinBank, said that in fact, banks are sitting on a fire when real estate businesses face troubles because they are all on the same boat.

The bank has reserved more than 21% of its total outstanding loans for the sector while the remainder will go to over 1,000 other industries, he added.

Regarding a proposal made regarding debt restructuring and rescheduling by the Vietnam National Real Estate Association, Dung said that it should be considered carefully.

"If the real estate industry applies for debt rescheduling and restructuring, other industries will also follow suit. That would break the principle of market fairness. In addition, if banks reschedule debt payment deadlines for businesses, they will not meet the Basel II standards and hence their credit ratings will be downgraded by foreign institutions," Dung explained.

Comments (0)
  • Read More
Vietnam signs deals to import nearly $3 bln worth of US agricultural products

Vietnam signs deals to import nearly $3 bln worth of US agricultural products

Vietnamese businesses accompanying Minister of Agriculture and Environment Do Duc Duy on a six-day visit to the U.S. signed multiple agreements to import nearly $3 billion worth of American agricultural products, expanding bilateral cooperation in the agricultural sector.

Economy - Sun, June 8, 2025 | 10:33 am GMT+7

EPC contract signed for O Mon IV thermal power project in southern Vietnam

EPC contract signed for O Mon IV thermal power project in southern Vietnam

An EPC contract signing ceremony for the O Mon IV thermal power project in Can Tho city took place on Friday, at the headquarters of state-owned Petrovietnam - the investor.

Energy - Sun, June 8, 2025 | 8:00 am GMT+7

Vietnam's agri major Hoang Anh Gia Lai ventures into mulberry cultivation, coffee production

Vietnam's agri major Hoang Anh Gia Lai ventures into mulberry cultivation, coffee production

After overcoming two major obstacles - debt and accumulated losses - Vietnam's agri major Hoang Anh Gia Lai JSC (HoSE: HAG) is charting a bold five-year strategic roadmap, introducing two new business segments: mulberry cultivation and coffee-tea production.

Companies - Sat, June 7, 2025 | 4:35 pm GMT+7

Stock trading accounts hit 10 mln in Vietnam

Stock trading accounts hit 10 mln in Vietnam

Vietnam recorded a large increase in the number of stock trading accounts in April and May, when the U.S. tariff turbulence caused strong market fluctuations.

Finance - Sat, June 7, 2025 | 3:38 pm GMT+7

Thailand’s SCG books $301 mln in Q1 sales from Vietnam

Thailand’s SCG books $301 mln in Q1 sales from Vietnam

Siam Cement Group (SCG) reported sales of VND7.77 trillion ($301 million) in Vietnam in Q1/2025, reflecting the country as a key market for the Thai conglomerate in Southeast Asia.

Companies - Sat, June 7, 2025 | 9:54 am GMT+7

Vietnam’s energy firm identifies 3 emissions violations among Vietnamese enterprises

Vietnam’s energy firm identifies 3 emissions violations among Vietnamese enterprises

Looking ahead, 2030 is a milestone year, as major global brands such as Unilever, Nestlé, H&M, and Nike have committed to cutting Scope 1 and Scope 2 emissions by 50-65%, said Pham Dang An, CEO of Vu Phong Energy Group, a major developer of clean energy in Vietnam.

Companies - Sat, June 7, 2025 | 8:00 am GMT+7

Deal acquiring financial firm of Vietnam's SeABank invalid: Aeon Financial

Deal acquiring financial firm of Vietnam's SeABank invalid: Aeon Financial

Aeon Financial Service Co., Ltd. on Friday stated that its deal to purchase a financial company owned by Vietnam's SeABank is invalid due to "inappropriate accounting transactions."

Finance - Fri, June 6, 2025 | 11:57 pm GMT+7

VSAP LAB to build $69 mln chip packaging tech laboratory in central Vietnam

VSAP LAB to build $69 mln chip packaging tech laboratory in central Vietnam

Vietnamese private firm VSAP LAB JSC has been approved as the investor of a VND1.8 trillion ($69.11 million) advanced packaging technology laboratory project that will assist semiconductor production in the central city of Danang.

Industries - Fri, June 6, 2025 | 8:11 pm GMT+7

Vietnam's major property developer Hoang Huy successfully raises $30.7 mln from parent company

Vietnam's major property developer Hoang Huy successfully raises $30.7 mln from parent company

Hoang Huy Investment Services JSC (HoSE: HHS) has successfully issued 64 million shares for VND800 billion ($30.7 million) via private placement to its parent company – Hoang Huy Financial Services Investment JSC (TCH).

Companies - Fri, June 6, 2025 | 3:32 pm GMT+7

Subsidiaries, affiliates likely not to enjoy preferential corporate income tax in Vietnam

Subsidiaries, affiliates likely not to enjoy preferential corporate income tax in Vietnam

Subsidiaries and affiliates of enterprises in Vietnam might not be eligible for preferential corporate income tax (CIT) rates of 15-17%, in order to prevent abuse of incentives like splitting income for tax avoidance, according to the Financial and Economic Committee under the National Assembly, the country's legislature.

Finance - Fri, June 6, 2025 | 3:22 pm GMT+7

VPS Securities JSC named Vietnam’s best broker again by The Asset

VPS Securities JSC named Vietnam’s best broker again by The Asset

VPS Securities JSC (VPS) has once again been honored as the “Best Brokerage House in Vietnam” at the Triple A Awards 2025, presented by The Asset, a leading Asia-focused financial publication.

Companies - Fri, June 6, 2025 | 11:40 am GMT+7

Vietnam's agri major BAF eyes two 6-story buildings for pig farming in southern Vietnam

Vietnam's agri major BAF eyes two 6-story buildings for pig farming in southern Vietnam

BAF Vietnam Agriculture JSC has submitted a proposal to the Ministry of Agriculture and Environment to develop a smart pig farming complex including two six-story buildings in the southern provinces of Tay Ninh and Binh Phuoc.

Industries - Fri, June 6, 2025 | 11:20 am GMT+7

Food major Kido leaders reveal real estate ambitions

Food major Kido leaders reveal real estate ambitions

Leaders of Kido Group, a leading Vietnamese food and cooking oil producer, said they see many positive policies that are helping to ease real estate market difficulties and create favorable conditions for the company to develop projects on its land reserves.

Real Estate - Fri, June 6, 2025 | 11:03 am GMT+7

Indonesia accelerates procedures to join OECD

Indonesia accelerates procedures to join OECD

The Indonesian Government has finalised the preparation of the Initial Memorandum (IM) for its accession to the Organisation for Economic Co-operation and Development (OECD), which will be submitted to OECD Secretary-General Matthias Cormann in Paris, France.

Southeast Asia - Fri, June 6, 2025 | 10:16 am GMT+7

OECD lowers Indonesia's growth forecast to 4.7%

OECD lowers Indonesia's growth forecast to 4.7%

The Organisation for Economic Cooperation and Development (OECD) has lowered its forecast for Indonesia's economic growth down to 4.7% this year, from the previous 4.9%, due to weakened domestic sentiment and heightened external risks.

Southeast Asia - Fri, June 6, 2025 | 10:15 am GMT+7

Vietnam, US sign additional agricultural trade deals worth over $600 mln

Vietnam, US sign additional agricultural trade deals worth over $600 mln

Vietnam and the U.S. on Wednesday signed MoUs on importing animal feed materials from Ohio state with total value exceeding $600 million.

Economy - Fri, June 6, 2025 | 10:03 am GMT+7