Customers make transactions at a Sacombank office. Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank) has not yet resumedlending to the real estate sector, except for the bank’s employees andrelatives to buy, build or repair real estate for living purposes, since thebank announced the suspension of home loans for individual customersin early April 2022.
According to Sacombank’s leaders, the bank has focused on lending tomanufacturing sectors, prioritised sectors, including agriculture, rural areas,export, supporting industries, small and medium-sized enterprises, high-techenterprises, trade and service industries with high added value such as export,service and logistics.
Sacombank and many other banks have suspended real estate lending, includingindividual home loans.
Trinh Bang Vu, head of Shinhan Bank Vietnam’s loan division, said as the bankused up most of the credit quota granted by the State Bank of Vietnam (SBV), itis currently suspending disbursement for individuals to buy houses.
Previously, Shinhan Vietnam was considered one of the foreign banks in Vietnamapplying the most competitive interest rates for home loans, at about 6-8% peryear.
A leader of another bank said his bank had stopped disbursing real estateloans since the end of March 2022 to meet the SBV’s regulations on creditgrowth. Since then, the bank has focused on lending for production andbusiness.
According to the SBV, by the end of April 2022, banks’ total outstanding loansto the real estate sector reached more than 2.28 quadrillion VND, up 10.2%compared to the end of 2021 and accounting for 20.44% of total outstandingloans in the economy.
SBV’s deputy governor Dao Minh Tu said SBV found some banks funded largeamounts of consumer loans that were related to real estate to individualcustomers, which had many potential risks if there was a sharp decline inthe real estate market.
In the second half of 2022, many uncertainties are unfavourable for theeconomy. Therefore, the central bank will combine flexibly fiscal and monetarypolicies to ensure market capital supply and control inflation.
SBV will aim to disburse loans to prioritised areas to help firms return tonormal production and business as before the pandemic, and rebound the economybesides strengthening the control of high-risk sectors such as securitiesand real estate.
Nguyen Quoc Hung, general secretary of the Vietnam Banks Association(VNBA), said up to 70% of collateral assets at banks are currently real estate,so banks will be the most vulnerable if the real estate market declines ifthey continue to lend the industry.
Meanwhile, finance and banking expert Dinh The Hien said the credit growthrate of more than 10% per year in the real estate sector was notworrisome, and it still needed to be strictly controlled to direct loansto the residential sector with real needs but not the speculative segment./.
VNA
