Hanoi (VNS/VNA) - Credit institutions forecast the demandfor banking services will be buoyant in the remaining months of this year, ofwhich credit growth will reach about 4.4% in the third quarter of 2023 and 12.5%for the whole year, according to a survey of the State Bank of Vietnam (SBV).

SBV’s latest survey on business trends of credit institutions in the thirdquarter of 2023 released late last week showed the business situation of thebanking system in the second quarter of 2023 improved much slower than theprevious quarter while pre-tax profits grew slightly but also lower thanexpected.

According to the assessment of credit institutions, the demand for loans,payment services and cards, and deposits improved in the second quarter of2023, but the number of credit institutions that saw the improvement was lowerthan the SBV’s previous survey.

Credit institutions forecast customers' demand for banking services will growpositively in the third quarter of 2023, but the rise will be at a slower ratecompared to 2022. The demand for loans is expected to increase more than thatof deposits.

Capital mobilisation of the whole credit institution system is expected toincrease by an average of 3.2% in the third quarter of 2023 and by 10.6% in2023.

Outstanding loans of the banking system are expected to increase by 4.4% in thethird quarter of 2023 and by 12.5% in 2023, down by 0.6% compared to the 13.7%forecast of the previous survey.

According to credit institutions, the liquidity of the banking system in thesecond quarter of 2023 remained solid and was more abundant than in the firstquarter. Credit institutions forecast the liquidity situation in the thirdquarter and the whole year will continue to improve compared to 2022.

They also expect the average deposit and lending interest rates of the wholebanking system to decrease by 0.31 and 0.42 percentage points in the thirdquarter, respectively; and decrease by 0.91 and 0.79 percentage points, for thewhole year, respectively.

In the survey, they said the overall customer risk in the secondquarter increased faster than the first, with 34.2% of credit institutionsidentifying the overall customer risk currently at a high level. A total of48.2% forecast the customer risk will increase in 2023 compared to lastyear.

According to the assessment, the ratio of bad debt to outstandingloans of the banking system showed a slight increase in the second quarter, butthe rate is expected to decrease in the third.

Regarding the labour and employment situation of the finance andbanking industry in the second quarter, despite improving compared to theprevious quarter, it did not reach the expected level. However, creditinstitutions expect the labour situation will be more positive in the thirdquarter of 2023 and the whole year./.