The State Bank targets system-wide credit growth of about 16% in 2025, the highest level in many years.
On the last day of 2024, the State Bank of Vietnam (SBV) issued a document to credit institutions, announcing the principles for assigning credit growth targets for 2025, with an expected growth rate for the entire industry of about 16%. The document also stated: "Credit management solutions will be implemented in accordance with macroeconomic developments to promote economic growth and control inflation".
Determined to push capital into the economy
According to the State Bank of Vietnam, the credit growth target assigned to each commercial bank will be based on the results of the 2024 rating as prescribed. Credit institutions need to ensure safe and effective credit growth, in compliance with legal regulations, based on risk management capacity, liquidity situation and capital mobilization ability.
SBV Deputy Governor Dao Minh Tu emphasized that the direction of credit growth should focus on production and business sectors, priority sectors and growth drivers according to the Government's policy. At the same time, it is necessary to strictly control credit for sectors with potential risks. SBV will closely monitor developments and actual situations to manage credit growth, ensure adequate credit supply to serve the economy, associated with the goal of stabilizing the macro economy, controlling inflation and promoting growth.
"The adjustment of credit growth targets will be proactively implemented by the State Bank, creating conditions for banks to provide sufficient and timely credit capital for the economy, without requiring credit institutions to send written requests," the State Bank stated.
In particular, the State Bank said it will continue to implement a roadmap to limit and eventually eliminate the management of credit growth targets for each credit institution.
The latest figures from the State Bank of Vietnam show that by mid-December 2024, credit in the entire economy increased by about 12.5% compared to the end of last year. Credit is focused on production, business and priority sectors.
At Tien Phong Bank (TPBank), by early December 2024, the bank's credit growth reached about 18%. Mr. Nguyen Hung, General Director of TPBank, said that the State Bank's assignment of credit targets from the beginning of the year depending on the rating of each credit institution has helped banks proactively provide capital to individual and corporate customers. "The economy is showing signs of improvement, people's credit demand is increasing, helping to push more capital into the market" - the leader of this bank expected.
The early announcement of credit growth targets demonstrates the State Bank's determination to push capital into the economy. Photo: LAM GIANG
Continue support solutions
However, the expected credit growth target for 2025 announced by the State Bank of Vietnam immediately attracted the attention of the market, because this increase is quite high compared to previous years (about 14% -15%).
According to Associate Professor Dr. Nguyen Huu Huan, Ho Chi Minh City University of Economics, the fact that the management agency announced a high credit growth rate and assigned credit growth targets to each commercial bank at the end of 2024 shows its determination to push capital into the market. This is also one of the capital solutions when the Government sets a very high GDP growth target for the whole year.
Speaking to a reporter from Nguoi Lao Dong Newspaper, economic expert - Dr. Dinh The Hien said that since the period of tightening monetary policy in 2011-2013, annual credit growth has only fluctuated between 12%-14%.
In the 2016-2019 period, credit growth was only about 11% but GDP growth remained high at 7%. From 2022 to present, the amount of credit capital released into the economy is oriented by the State Bank of Vietnam at around 14%-15%. Therefore, the figure of 16% in 2025 can be said to be higher than in previous years.
"In the recent period, some banks have risen to the top in terms of credit growth, but bad debt has also increased. Therefore, it is right to push capital strongly into the market, but it is necessary to closely control the indicators on credit quality, service revenue, bad debt ratio, customer loyalty during the borrowing and deposit process... These are the indicators for banks to create added value from their services and achieve sustainable growth," said Dr. Dinh The Hien.
At the conference on implementing the banking tasks in 2025, Deputy Prime Minister Ho Duc Phoc requested the SBV to continue to coordinate monetary policy, fiscal policy and other policies to ensure the safety of the banking system, reduce bad debt, and provide capital to promote economic development. The SBV and credit institutions need to continue to effectively implement solutions to support capital for enterprises, especially small and medium enterprises; implement measures to support capital for green development, green production, green consumption, clean energy, etc.
Regarding interest rates in 2025, Associate Professor Dr. Pham The Anh, Head of the Faculty of Economics - National Economics University, commented that the current interest rate level is unlikely to decrease further, and may even have to increase slightly. The reason is because interest rates depend on many factors, especially inflation. According to him, the current inflation rate of around 3% - 4% is normal and is unlikely to decrease further.
"To lower interest rates, it is necessary to give up part of the exchange rate target, but the management agency is aiming to balance both goals: maintaining interest rates around 6%/year and controlling inflation at 4%. Therefore, to ensure positive real interest rates, the possibility of reducing lending rates is very low. With the current interest rate, maintaining it is a success and we should not expect further reductions in the near future," Mr. Pham The Anh emphasized.
Interest rate cuts still possible
In the 2025 macro update report, experts from Vietcombank Securities Company (VCBS) expect lending interest rates to remain low despite differentiation.
Credit quality and lending interest rates are closely monitored by the State Bank. VCBS expects lending interest rates to continue to be maintained at low levels to support businesses in line with the Government's direction. However, businesses with weak credit histories may have difficulty accessing credit and may even have to accept higher interest rates.
However, from the bank's perspective, Mr. Nguyen Hung said that if conditions are more favorable and input interest rates decrease, TPBank will adjust lending rates down for both new and existing customers.
Source: https://nld.com.vn/bom-manh-von-tin-dung-ngay-tu-dau-nam-196241231215456587.htm
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