New circulars to promote credit growth: securities broker
The State Bank of Vietnam’s (SBV) two new circulars are expected to have positive impacts on banks with a high proportion of real estate or consumer loans, and promote credit growth amid excess bank liquidity, according to top Vietnamese broker VNDirect.
The SBV on Monday announced the issuance of Circular 02 allowing credit institutions and foreign bank branches to reschedule debt repayment deadlines and keep debt categories unchanged to support struggling customers.
On the same day, the central bank announced Circular 03 on ceasing the effect of Clause 11, Article 4 of Circular 16 dated November 10, 2021 on the purchase and sale of corporate bonds by credit institutions and foreign bank branches.
According to VNDirect, the two circulars are to materialize the government’s Resolution 33 dated March 11, 2023 on some measures to remove barriers for and promote the safe, healthy, and sustainable development of the real estate market.
Circular 02 stipulates that credit institutions can reschedule debt repayment deadlines and keep the debt categories unchanged for production-business and consumer loans; and adjust the method of making provisions for the above loans.
“This circular will partly remove the liquidity problems of enterprises, thus saving those with good fundamentals,” the broker said.
As the ailing real estate market is a matter of concern for the banking industry, Circular 02 will help ease the provision pressure on banks when rescheduled debts will be paid in 2023 and 2024, it added.
VNDirect believed that the circular will have a positive impact on investor sentiment toward banks with a high proportion of real estate or consumer loans in their credit portfolio like Techcombank, MBBank, VPBank, and HDBank because these banks are facing higher provisions than others with fewer real estate loans at this time.
Meanwhile, Circular 03 allows credit institutions to buy back corporate bonds unlisted on the stock market or unregistered on the unlisted public company market that they sell without having to wait 12 months from the date of selling as currently stipulated in Clause 11, Article 4 of Circular 16.
“This is also a way for banks to promote loan growth through the redemption of corporate bonds, in the context of weak credit growth, about 2% in the first quarter of 2023, and excess liquidity at banks,” VNDirect said.
The circular will also help increase bond demand and benefit banks that are active in the corporate bond market like Techcombank, MBBank, and VPBank. However, in the current context, these banks must prioritize risk management and asset quality balance other than growth goals.
Ha Thu Giang, director general of the SBV’s department of credit for economic sectors, said that rescheduling debt repayment deadlines and keeping debt categories unchanged serve to support and remove difficulties for customers.
However, credit institutions still need to evaluate, classify and make provisions based on customers’ actual debt categories, she said, noting that according to Circular 02, credit institutions must make a provision of at least 50% of total outstanding loans in 2023 and 100% in 2024.
Can Van Luc and his co-workers from the BIDV Training & Research Institute said that Circular 03 will support corporate bond investors and issuers with cash flow to pay part of the amount of corporate bonds maturing in 2023, mainly in Q2 and Q3, thus maintaining production, business and investment and consumption activities.
"However, enterprises must ensure good financial health and business performance to win the highest internal credit rating of credit institutions," they wrote.
- Read More
Effective M&A deal depends on thorough understanding, value addition potential: Kido exec
An effective M&A transaction depends on fully understanding the company being acquired in order to create added value, says Kido Group CEO Tran Le Nguyen.
Companies - Thu, October 31, 2024 | 1:22 pm GMT+7
No budget apartments in Vietnam, chronic supply-demand gap widens
Vietnam saw no supply or transaction of low-cost apartments priced below VND25 million ($988) per square meter in the third quarter, says a real estate report by the Ministry of Construction.
Real Estate - Thu, October 31, 2024 | 1:10 pm GMT+7
Vietnam steel major SMC remains bogged down with difficulties
Steel manufacturer SMC Trading Investment JSC has been actively selling assets to generate cash for debt repayment and maintain operations since the beginning of this year.
Companies - Thu, October 31, 2024 | 10:41 am GMT+7
Vinhomes’ earnings fall 39% to $777 mln in Jan-Sep
Vinhomes, the largest residential housing developer in Vietnam, booked a net profit of VND19,642 billion ($777 million) in the first three quarters this year, down 39.2% year-on-year.
Companies - Thu, October 31, 2024 | 9:58 am GMT+7
AI cannot replace customer service staff: MoMo exec
AI cannot replace customer service staff, but it can give them more time to prepare and provide better care for customers, says Thai Tri Hung, senior deputy general director and chief technology officer of e-wallet app MoMo.
Companies - Thu, October 31, 2024 | 8:11 am GMT+7
Vietnam property developer Novaland posts skyrocketing Q3 profit
Novaland, a leading real estate developer in Vietnam, reported its after-tax profit hit VND2.95 trillion ($166.62 million) in the third quarter of this year, a 21.6-fold rise year-on-year.
Companies - Wed, October 30, 2024 | 10:59 pm GMT+7
Thailand fruit prices increase at the end of successful season
Thailand’s fruit season is wrapping up this year with a notable surge in prices for durian, mangosteen, rambutan, longkong, and mango.
Southeast Asia - Wed, October 30, 2024 | 10:30 pm GMT+7
BlackBerry launches regional cybersecurity headquarters in Malaysia
Canada-based BlackBerry Ltd has established an Asia Pacific regional headquarters for its cybersecurity division in Cyberjaya, Malaysia, which is now fully operational.
Southeast Asia - Wed, October 30, 2024 | 10:27 pm GMT+7
Malaysia faces rising cybersecurity threats
Malaysian users are facing a high level of cyber threats, which may coincide with the rapid expansion of data centers in the country.
Southeast Asia - Wed, October 30, 2024 | 10:24 pm GMT+7
Indonesia to develop 3 million more hectares of rice fields
The Indonesian government is working to implement a program to develop 3 million hectares of new rice fields to strengthen the country's food resilience amid global challenges and increasing population demands, national news agency Antara reported.
Southeast Asia - Wed, October 30, 2024 | 9:24 pm GMT+7
Singapore’s digital economy thriving
Singapore’s digital economy accounted for 17.7% of the island state's GDP in 2023, up from 17.3% in the previous year, according to its Infocomm Media Development Authority (IMDA).
Southeast Asia - Wed, October 30, 2024 | 9:21 pm GMT+7
Viettel, UAE’s Presight to boost Applied AI, digital transformation in Vietnam
Vietnam’s Viettel AI and the UAE’s Presight have agreed to jointly advance the development of Applied AI and digital transformation initiatives in Vietnam.
Companies - Wed, October 30, 2024 | 8:30 pm GMT+7
Vietnam utility EVN to build $277 mln transmission line to import power from China
State utility Vietnam Electricity (EVN) has got the go head to build the VND7,010 billion ($277.2 million), 500 kV Lao Cai-Vinh Yen line for transmission in the northwestern region and to import power from China.
Energy - Wed, October 30, 2024 | 8:09 pm GMT+7
Jack Ma-invested fund unloads Vietnam holdings worth $130 mln in Q3
China’s Tianhong Vietnam Market Stock Initiated Securities Investment Fund (QDII) saw outflows of around RMB930 million ($130.4 million) in the July-September quarter.
Finance - Wed, October 30, 2024 | 4:53 pm GMT+7
Private lender HDBank reports strong profit growth in 9 months
Ho Chi Minh City-based private creditor HDBank's pre-tax profit surged 47% year-on-year to VND12.65 trillion ($499.6 million) in the first nine months of this year.
Banking - Wed, October 30, 2024 | 4:42 pm GMT+7
Real estate M&As gather pace as local firms struggle with capital insufficiency, restructuring: experts
2024 is considered a vibrant year for mergers and acquisitions (M&A) in Vietnam’s real estate sector, as domestic property companies still face challenges related to capital and restructuring, according to experts.
Real Estate - Wed, October 30, 2024 | 4:14 pm GMT+7
- Consulting
-
Remove roadblocks to lure foreign investment into Vietnam: HSBC exec
-
Rethinking resilience: How typhoon Yagi redefines supply chain strategies in northern Vietnam
-
In trade and investment, ASEAN and China are better together
-
AI can be a game changer for Vietnam tourism
-
Investment opportunities in LNG-to-power projects in Vietnam
-
Pepper prices 2024: will the dream of 'black gold' repeat?