Banking system may find difficult to reach 2012′s credit growth target

 The current interest rate for corporate customers in preferred fields including export and import, production and business, agriculture and rural development and supporting industry is around 11 percent – 13 percent per year. For individual customers, many large scaled banks also apply the interest rate of around 12 percent/year.

The Maritime Commercial Joint Stock Bank (Maritime Bank) has recently offered credit package of five trillion dong under the preferred interest rate with MFloat import supporting product. Fixed preferred interest rate is seven percent per year and maximum of 9 percent/year. Eximbank has also provided 5 trillion dong for corporate customers with the interest rate of 10 percent/year plus one percent of exchange rate fluctuation. Vietcombank’s interest rate is 12 percent/year.

According to Nguyen Phuoc Thanh, director of Vietcombank, from the start of 2012 till now, Vietcombank has had 2 times of interest rate decrease and reduced its profit by 1.55 trillion dong.

Van Duc Muoi, Managing director of Vissan Limited Company (Vissan) said “The current average interest rate at 13 percent – 15 percent/year is not attractive to enterprises, especially in the situation of low buying power and big amount of inventory. In comparison with other countries’ interest rates, Vietnam’s is very high while the profitability of production, business and export is being narrowed”

With the same ideas, many enterprises showed their demand of an interest rate adjustment down to 10 percent/year.

Nguyen Van Binh, Governor of State Bank of Vietnam (SBV) said that by July, 2012 credit growth of banking sector only reached one percent. Meanwhile its year target is 15 percent – 17 percent. SBV targets 8 percent – 10 percent of credit growth in H2/2012.

However, according to Tran Du Lich, member of National Council of Consulting Finance and Monetary Policies, it is difficult to reach this credit growth in the last six months in 2012 due to bad debt problems, inventory and interest rate pressure on Vietnamese enterprises.