Vietnamese banks urged to stem rapid lending

The loan growth of commercial banks hit 17-18% on average.

Vietnamese credit is expected to expand at a more muted pace as lenders temper lending to meet the government's 14% loan growth target for 2019, according to Viet Dragon Securities Company (VDSC) as mentioned in Vietnam Net.

In 2018, outstanding loans rebounded in Q4 after a temporary stagnation in the previous quarter amidst an additional quota from the central bank. 
Also read: Vietnam hammers hard on bad loans as banks clear $6.42b in soured assets in 2018.

Also read: Vietnam hammers hard on bad loans as banks clear $6.42b in soured assets in 2018

Loan growth for commercial banks grew at a range of 17-18% YoY in 2018, with the Technological and Commercial Joint Stock Bank (Techcombank) reported the highest credit growth amongst its peers at 20.3% YoY. Vietcombank maintained credit growth of 7.7% YoY following the plan to handle impaired loans as per approved by the central bank.

Meanwhile, state-owned banks observed lower loan growth levels, including the Bank for Investment and Development of Vietnam (BIDV) and Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) which saw their loan growth fall less than 15%.

For ten banks, in 2018, customer loans growth and credit growth maintained were higher than those of customer deposits and mobilisation (13.7% vs 13.2%, and 12.7% vs 10.6% respectively), which pushed up the loan-to-deposit ratio (LDR) for most banks.