Banking Industry Ensuring Prioritized Loans as Directed by the Government

Implementing Resolution 02 of the Government, local commercial banks continue restructuring loan due time for customers to help them actively re-balance their capital, repay loans on time and reduce arising bad debt. In 2013, local credit institutions restructured loans for 2,960 customers with value of VND3,792 billion; of which there were 277 enterprises with total credit of VND3,098 billion. Apart from granting loans for prioritized subjects with low interest rates as directed by the State Bank of Vietnam (SBV), many credit institutions’ branches offered credit products with attractive interest rates as directed in each system; all of these actions have helped enterprises and businesses lower their financial burden.

 

Local branches of BIDV, VCB, Vietinbank, Agribank have cut down interest rates of old loans in VND to 13 percent per year; followed by other credit institutions’ branches.

 

Moreover, credit institutions’ branches in the area aggressively grant loans for prioritized subjects as directed by the SBV with current interest rates of about 7.8 – 9 percent per year. According to regulation, these subjects must be assessed by banks as financially healthy, transparent ones, however, in the current context of economic difficulties when most enterprises with overdue loans have to restructure loans time, it is very difficult for enterprises to access this capital. Therefore, in 2013, accumulated revenues from granting loans reached about VND4,545 billion, of which there were 950 enterprises with loans of VND3,538 billion; credit value to 31^st December 2013 was estimated to be VND2,100 billion. Accordingly, revenues from granting loans for agriculture and rural area reached about VND1,013 billion, credit value were VND810 billion; revenues of loans for export obtained VND64 billion, credit value were VND16 billion; revenues of loans for supporting industries reached VND53 billion, credit value were VND48 billion.

 

According to Mr Le Dinh Lieu, Director of Ba Ria - Vung Tau branch of SBV, apart from credit growth, credit institutions in the area are focusing on improving credit quality and actively tackling bad debt, recovering overdue debts, handling with risks of bad debt as regulated; implementing solutions for arising bad debts. Accordingly, credit institutions have restructured loans for customers in terms of their business cycle to help them obtain capital to repay principal and interest. Some branches of joint stock commercial banks have submitted head offices to consider restructuring loans, reducing interest rate for customers who have completed bad debt documents; several other branches have exchanged bad debts to head offices for them to monitor, manage loans and handle bad debt as directed by the Government and SBV. Therefore, credit quality to the end of 2013 has been improved, bad debts over credit institutions in the area were about VND1,000 billion, making up about 3.42 percent of total credit, down VND70 billion over QIII/2013.

 

Despite remaining difficulties, with determined solutions in 2013 Ba Ria – Vung Tau banking sector has ensured loans for prioritized subjects as directed by the Government, credit grows safely and effectively. Promoting these achievements, in 2014, the banking sector is striving to conduct diligently their roles in the economy, concentrate on granting loans for agriculture and rural area development, industrial development; at the same time continue dissolving difficulties for enterprises, especially supporting small and medium sized enterprises for them to access to capital and contribute to the provincial economic development.