Real estate business loans 'save' credit of many banks

Many banks in the top of the market with the highest credit growth have recorded "loans for real estate business activities" as their main outstanding debt.

By the end of October, credit growth in the entire economy had reached less than 7%, compared to 11.5% in the same period last year. The credit "problem" has become a difficult problem for the banking industry as it faces many challenges at the same time, from weak capital absorption capacity of enterprises, low demand of the economy, to high pressure of bad debt, making lending more cautious.

However, in the gloomy general picture, there are still banks with extraordinary credit growth. Among the 27 banks currently trading and listed on the stock exchange, three banks had credit growth of over 15% by the end of the third quarter, and 12 banks had growth of 10% or more.

VPBank, the bank with the highest credit growth in the first 9 months of this year, allocated most of its "quota" to lending to real estate businesses. Outstanding loans for this sector increased by more than 50% in the first 9 months of this year, adding more than VND27,000 billion, making it one of the two sectors with the highest increase in outstanding loans. The remaining segment is household business credit with a loan size increase of more than 31%.

By the end of the third quarter, the outstanding loan balance of parent bank VPBank was over VND454,000 billion, up nearly 26% compared to the beginning of the year. Of which, the proportion of loans for real estate business activities accounted for over 17.5%, ranking third in business sectors, after credit for business households and personal loans for buying houses and receiving land use rights.

Outstanding loans for individuals to buy houses increased by more than VND5,000 billion compared to the beginning of the year, but the proportion decreased from 22.93% to 19.48%.

Techcombank - a top private bank - also recorded similar developments.

According to the parent bank’s financial report, Techcombank’s outstanding loans for real estate business increased by more than VND50,000 billion in the first 9 months of this year, the highest growth sector and accounting for the majority of the bank’s credit growth. By the end of the third quarter, this segment accounted for 34.63% of outstanding loans to customers, compared to 26.44% at the beginning of the year.

In contrast, Techcombank's personal loans decreased by nearly VND20,000 billion, with the proportion falling from 52.86% at the beginning of the year to 42.6%.

In the top 5 banks with the highest credit growth, in addition to VPBank and TCB, MBB, MSB and HDBank are the remaining banks. By the end of the third quarter, credit of parent bank MSB increased by 18% compared to the beginning of the year, MB by 16% and HDBank by 12%.

HDBank's growth is somewhat similar to the two banks mentioned above. By the end of the third quarter, the bank's real estate lending increased by nearly VND15,000 billion compared to the beginning of the year. The proportion of this segment in total outstanding loans by the end of the third quarter was 12.89%, compared to 8.49% at the beginning of the year. Outstanding loans for construction activities also increased by more than VND5,000 billion.

Compared to VPBank or Techcombank, the growth rate of real estate business credit of MB and MSB is lower. The proportion of this segment in MB's total outstanding loans increased from 4.91% at the beginning of the year to 6.81% by the end of the third quarter, with the loan scale increasing by more than VND13,000 billion.

However, the sectors with the strongest growth of MB are wholesale - retail, auto and motorbike repair; credit for business households and credit for processing and manufacturing industries. The proportion of these three sectors is 28.38%, 26.14% and 16.73% respectively.

For MSB, the increase was spread across many sectors. In terms of scale, credit focused on light industrial trade, construction materials trading, personal loans and real estate trading.

At mid-sized banks, which recorded high credit growth, real estate business loans also played a major role in loan growth in the first 9 months of the year.

As for SHB, outstanding loans for real estate business by the end of the third quarter were over VND66,000 billion, more than double that of the beginning of the year. The proportion of this segment rose to second place with 16.38%, just after wholesale - retail loans, auto and motorbike repair. At TPBank, real estate and construction business helped the bank lend more than VND7,000 billion in the first 9 months of the year.

Explaining this trend, some bank leaders said that it was to adapt to the market context. According to Mr. Jens Lottner, General Director of Techcombank, this bank wants to promote the retail sector and does not want to expand the loan portfolio to corporate customers, but the current market context is "not suitable".

The high interest rate environment is hampering the demand for loans from the retail group, and consumer finance is also risky. Many small and medium enterprises say that the cost of borrowing is too high at the moment, and even when interest rates are lowered, it is not attractive enough. In such an environment, according to the CEO of Techcombank, large companies and corporations are more resilient. The source of money from this group is diverse, coming from different components of the economy, helping their ability to balance better.

"We are not stopping the expansion of the retail sector, but if we have to look for a place to invest money right now, it should be large enterprises," said the CEO of Techcombank.

In addition, according to Techcombank's corporate lending data, most of the loans are short-term, which allows the bank to transform more quickly. "The retail focus strategy remains unchanged, but at this stage, large enterprises are the less risky option. When the market changes, Techcombank will move as I said. This is just a matter of time, not a matter of strategy," Mr. Jens Lottner assessed.

In the leading group, all three state-owned banks, Vietcombank, BIDV and VietinBank, recorded a customer loan scale of more than 1 quadrillion VND by the end of the third quarter. However, these banks did not break down the outstanding loans for each economic sector.

Minh Son

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