Banks have money to lend - but few takers


Some of Vietnam’s leading banks are now reporting modest credit growth at best - and even contraction in some cases-despite ample capital resources and sliding lending rates.

DongA Bank’s credit business contracted 2 per cent in the first quarter of 2013 despite its copious capital, according to the bank’s general director Nguyen Phuong Binh.

“We found it would not be easy to find good customers as well as properly identify risks in current context, which are major hindrances to credit growth. This year DongA envisages 9 per cent growth target, much lower than last year,” Binh said.

Eximbank, known for its smooth work in import-export financing, is also facing a stiff challenge in bolstering credit growth.

Accordingly, Eximbank recorded a credit decline in the year ending April.

Eximbank’s general director Truong Van Phuoc attributed the bank’s poor credit performance to sinking market consumption and firms’ high unsold stock, which have averted firms from borrowing for production expansion or launching new business.

“Our bank still targets a 15 per cent credit growth this year in parallel to bettering credit quality and ramping up efforts to drive down overdue debts and bad debts,” said Phuoc.

ACB, meanwhile, reported a credit growth of 2 per cent in the first quarter against 12 per cent full-year credit growth target.

At state giant BIDV, its credit growth in the first quarter was 2.7 per cent only, tantamount to VND8.6 trillion ($410 million).

In respect to the bank’s VND3 trillion ($143 million) preferential credit package which was launched from onset of April, only VND100 billion ($4.8 million) was disbursed so far, according to the bank’s deputy general director Tran Xuan Hoang.

Poor profit growth made banks cautious in devising profit targets in 2013.

For instance, DongA Bank has set its pretax profit at VND1 trillion ($48 million) in 2013, up VND230 billion ($11 million) against 2012’s implemented level but still VND500 billion ($24 million) lower than 2012’s projection.