WB Says Vietnam's Credit Grows Too Fast

Vietnam’s credit market has grown at the too fast pace at 40 per cent by August 2007, after being curbed in the past years, reduced to 20 per cent in 2006, the World Bank said in a response to Vneconomy.

 

The state-owned commercial banks have stable credit growth of about 23 per cent, while joint stock commercial lenders have growth of up to 77 per cent by August.

 

Such credit growth rate would create worries about quality of loans, WB said.

 

In addition, the deposits in both state-owned and joint stock banks have high growth of 50 per cent on average over the past 12 months, which WB said it would make banks to deal with prolonged redundancy of available capital.

 

The State Bank of Vietnam targets to lower credit growth in the remaining months of this year to maintain the growth at 30 per cent for the whole year.

 

Keeping credit growth stably is within the reach of the central bank, it has merely used the compulsory reserve ratio as a main solution to lower the growth so far, WB said, adding that the SBV has still no other actions against the current overgrowth of credit market. (VnExpress)