Vietnam begins 2024 with 0.6% credit growth fall
Credit growth of Vietnam’s banking system dropped 0.6% in January over end-2023, according to the State Bank of Vietnam (SBV), the nation’s central bank.
SBV officials said at a Tuesday conference in Hanoi that some commercial banks saw January credit growth decrease by as much as 1.2-2.3%.
While January’s was low compared to the same period in previous years, this was understandable because end-2023 was a period of hot credit growth, they said.

Credit growth of Vietnam’s banking system dropped 0.6% in January 2024 compared to end-2023. Photo by The Investor/Trong Hieu.
In December alone, outstanding credit across the economy increased 4.56 percentage points (equivalent to more than VND540 trillion or $22 billion) over November, accounting for one-third of the total expansion in 2023.
According to representatives of some commercial banks, the main reason for credit growth decline in the system was the economy's weak capital absorption capacity.
Nguyen Thanh Tung, general director of the state-owned Vietcombank, said that in January, the bank's lending declined by VND30 trillion ($1.22 billion) or 2.3% compared to end-2023 with the ongoing decline in real estate credit that began last year.
"The difficult economic situation, people's declining income, the ailing real estate market with few new projects licensed in 2023, and many lingering legal problems are major reasons behind this situation," he said, adding that falling orders have also led to low demand for bank capital.
However, the Vietcombank representative also noted that credit balance tended to decrease in January and February every year and increase again in the coming months.
Similarly, at another state-owned bank BIDV, January credit dropped 1.25% compared to the end of last year.
The bank’s general director Tran Long also attributed this to the economy's weak capital absorption, slow recovery of growth drivers, struggling businesses and their shrinking financial capacity.
Some credit and interest rate support programs and policies have seen quite modest disbursement results, he said.
For instance, the VND20 trillion ($815.2 million) credit program for workers under the cooperation agreement between the Vietnam General Confederation of Labor and two financial companies HDSaison and FECredit has disbursed just VND10 trillion ($407.6 million).
By December 31, 2023, nearly 188,000 customers had their debt repayment deadlines rescheduled and their debt categories kept unchanged with total principal and interest value of over VND183.5 trillion ($7.48 billion).
Last year’s credit growth of 13.71% fell short of the 14-15% target. This year, the SBV has set a credit growth target of about 15%, saying it may be adjusted to suit the actual situation.
To boost credit growth, instead of allocating a part of the credit growth quota to banks at the beginning of the year as was done previously, the central bank set an overall credit growth quota of 15%.
SBV Deputy Governor Dao Minh Tu said that with ongoing difficulties forecast to continue this year, the allocation of an overall credit growth quota in the first month of the year aimed to boost aggregate demand and create favorable conditions for banks to provide capital to meet economic growth needs.
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