Credit growth forecast to reach 13-14 percent this year: SSI
Credit growth in Vietnam may reach 13-14 percent this year, partly driven by progress with the COVID-19 vaccine, according to a 2021 banking outlook report released by the SSI Securities Corporation on January 6.
At Vietcombank's headquarters in Tran Quang Khai Street, Hanoi. (Photo: VNA)
HCM City (VNA) - Credit growth in Vietnam may reach 13-14percent this year, partly driven by progress with the COVID-19 vaccine,according to a 2021 banking outlook report released by the SSI SecuritiesCorporation on January 6.
Vietnam beginning human trials of a COVID-19 vaccine is likely to givethe domestic economy a push in 2021, the SSI said.
Its 2021 forecast is higher than the estimated 11-12 percent in credit growthlast year.
The expected recovery of foreign trade, production, and consumption thisyear will boost the growth of lending, with retail lending likely to bounceback to pre-pandemic levels, according to the report.
The retail lending market recorded a compound annual growth rate (CAGR)of 28.5 percent between 2016 and 2019, which slowed to 8.3 percent in the firstthree quarters of 2020 compared to the beginning of the year.
Increases in lending demand may be supported by low interest rates andcommercial banks’ expected moves to loosen lending standards to pre-pandemiclevels when signs of economic recovery are more evident.
Additionally, as the government tightens control over the issuance ofcorporate bonds under Decree No 81/2020/ND-CP, businesses may shift to bankloans for funding. The total value of corporate bonds sold in the first ninemonths of last year was 245.5 trillion VND, equal to 2.8 percent of totalcredit.
The SSI also expects standardsfor consumer loans to return to roughly what they were beforeCOVID-19 broke out in the second half of 2021,further fuelling overall credit growth. Consumer loans accounted for about 1.6percent of total outstanding loans last year./.
Outstanding loans in Vietnam exceeded 8.79 quadrillion VND (378.74 billion USD) as of November 17, an increase of 7.26 percent from the end of 2019, according to the State Bank of Vietnam (SBV).
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The industry's performance has been powered by bold investments in modern production lines, enabling Vietnamese firms to produce complicated products which were exclusive to advanced economies.
At Vietcombank's headquarters in Tran Quang Khai Street, Hanoi. (Photo: VNA)
