What is the credit growth limit of banks in 2019?
03/06/2019 21:30 GMT+7 18
In 2019, the majority of banks were allocated the initial credit growth limit of 2019 at 13%, lower than the figure of 14-15% of 2018. Many banks "look forward" to loosen the "room" after meeting Basel II standards
Which banks are allowed to loosen credit "room"
According to Rong Viet Securities Joint Stock Company, in 2019, most banks were allocated the initial credit growth limit of 2019 at 13%, including banks such as ACB, MBBank, HDBank, TPBank and Techcombank.
Some banks are assigned lower targets including BIDV (12%), VPBank (12%) and VietinBank's special case because the bank is implementing restructuring plan.
Meanwhile, Vietcombank, the first bank recognized by the State Bank (SBV) to meet Circular 41 before the end of 2018, was assigned a slightly higher target, at 15%.
In previous years, the SBV tended to give each bank an initial target in the first quarter, then based on the actual situation, it could be adjusted to add additional limits to some banks. The last quarter of the year to ensure credit growth in the year is within the allowed limit.
In 2018, the target of allocating to each bank at the beginning of the year was 14-15% and then in the fourth quarter, some banks were raised to about 18-20%.
In the review of banking activities in the first quarter of 2019, representatives of the SBV said that banks implementing Circular 41 before the deadline (on Basel II) will be given priority on credit growth targets.
Therefore, VDSC expects that the two banks will be approved to comply with the remaining 2018 VIB and OCB, although there is no information on the final target assigned by the State Bank, it will also receive a higher initial limit than with other banks.
In 4/2019, there are 4 more banks approved by the SBV to comply with the Circular 41 before the term are MBBank, ACB, TPBank and VPBank. These banks will begin to apply new capital safety standards starting from May 1.
Thus, there have been 7 banks approved for compliance early. Most of these banks have great expectations that the SBV will consider adding credit growth targets assigned earlier this year.
Many banks set higher credit growth targets than assigned targets
Two other banks are also applying for pre-term compliance certification: Techcombank and HDBank. This is a common reason why at the recent shareholders' meeting, many banks still set higher credit growth targets than assigned targets, such as MBBank (15%), VPBank (15%), TPBank (20%), HDBank (24%), OCB (30%) and VIB (35%).
Some banks have the target of credit growth equal to the assigned targets including Vietcombank (15%), Techcombank (13%), ACB (13%), BIDV (12%) and VietinBank (7%). In which, Vietcombank and ACB (approved to comply with Circular 41) and Techcombank (pending approval) are ready to push up the credit even further if the State Bank adds more targets. In contrast, with BIDV and VietinBank, VDSC believes that these two banks will only maintain actual credit growth at or below the above target due to current capital constraints.
According to the first quarter results of banks, the actual credit growth in the first quarter of the year continued to have differentiation among banks. VietinBank, BIDV, ACB and Techcombank are banks with modest credit expansion in the first quarter, so there are still many areas to grow for the last 3 quarters with the growth rate of 1.1%; 3.6%, 2.7% and -0.3%. In particular, although Techcombank had negative credit growth, customer lending still increased by 2.4%. In contrast, some banks boost credit right from the beginning of the year, such as TPBank (up 11.3%), OCB (up 8.6%), MBBank individually (8.4%), individual VPB ( increased 6.9%), ie used more than half of the original assigned targets. These are all banks that set a year-on-year growth target higher than the assigned limit and expect to be granted more credit limit by meeting Circular 41.
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