Vietnam Credit Growth Cools despite Strong Money Supply

Lending in the Vietnamese banking system signaled a slowdown in the first nine months of this year, despite a stronger rise on the supply side.


Major Vietnamese banks have cut deposit interest rates by 0.3-0.5 percentage points. Photo: Quang Phuc/VnEconomy

Total outstanding loans in the Vietnamese banking system expanded 10.46% in the year to September 20, compared to a 10.78% growth in the same period of last year, according to the General Statistics Office (GSO).

Total deposits at banks, meanwhile, outstripped with a 12.02% expansion, compared to 8.9% in the same period of 2015.

The total money supply (M2) in the system increased 11.76% in the January-September period, higher than 8.8% in the comparable period of 2015.

The State Bank of Vietnam (SBV), the country’s central bank, said in July that overall credit growth reached 8.16% in the first half of this year, speeding up from an increase of 7.86% from a year earlier.

The banking authority earlier this year set a target for credit growth at 18%-20% this year.

Four state-controlled banks on September 26 cut deposit interest rates by 0.3-0.5 percentage points for less-than-12-month terms, fanning hopes that lending rates will go down in the final months of this year.

Tuan Minh / BizLIVE