Consumer loans rise nearly 30 percent by end of May

Consumer lending by the end of May rose 29.7% against the end of 2016, the National Financial Supervisory Commission (NFSC) has said.

consumer loans rise nearly 30 percent by end of may hinh 0
Of the total consumer loans, home renovation loans and home purchase loans accounted for 52.8%, compared with 49% in the end of 2016.

As per the NFSC’s report, credit growth of the entire banking system was positive, reaching 6.8% in May, compared to 5.7% in the same period in 2016. 
In particular, the lending terms have changed towards fewer medium-term and long-term loans. The proportion of short-term loans was estimated at 45.4 percent, against 44.9 percent in late 2016. Meanwhile, the proportion of medium- and long-term loans fell to 54.6%, against 55.1%.

Lending in Vietnamese dong accounted for nearly 92%, while lending in foreign currencies fell slightly to 8.2% of the total lending from 8.4% in late 2016.

At the end of the first quarter of 2017, the banking sector continued to be the economy’s main source of capital supply, accounting for nearly 60% of the total capital supplied via the financial market.

The NFSC reported that as of now, liquidity troubles have declined. The ratio of loan to deposit (LDR) of the entire banking system was 87% as of May, slightly lower than earlier. Inter-bank interest rates have also fallen to 4-4.2 percent per year from the previous 5%. The State Bank of Vietnam withdrew VND28 trillion (US$1.22 billion) in May.

According to the NFSC, the positive liquidity status is because of a rapid rise in State Treasury deposits as budget disbursement remains slow. As of late April, State Treasury deposits reached VND122 trillion, up 28.4% against the beginning of the year.