ANTD.VN - Bank representatives said that if today businesses put all their difficulties on banks, in the future when banks are in difficulty, businesses will also face difficulties.
Business is difficult, banking is also difficult
According to statistics from the State Bank, by the end of the first quarter of 2023, the entire industry's credit increased by only more than 2%, while in the same period last year it was 5%. This shows that the capital absorption capacity of enterprises is slowing down, as enterprises are reducing production when capital costs increase, and people are also reducing their finances.
According to Mr. Le Thanh Tung, member of the Board of Directors of VietinBank, banks are the "test barometer" of the economy, if businesses are in trouble, banks will also be in trouble. The financial reports of the first quarter of 2023 of 27 listed banks show that profits in the first quarter of 2023 decreased by 4.4%.
The banking industry has also faced many risks in recent times. In 2022, the risks include liquidity, exchange rate, interest rate, and reputation risks (due to the impact of corporate bonds and insurance).
The biggest risk in 2023 is credit. “When businesses are in difficulty, banks have to increase provisions and write off accrued interest. Not to mention, the difficult economy also increases other risks in the banking sector such as: security risks at transaction offices (robbery), internal fraud risks, cyber attacks from outside…” – Mr. Tung said.
According to him, income from loan interest is the main income of banks, the quality of debt is declining, having to set aside more provisions will affect the bank's profits. State-owned commercial banks like VietinBank also have to reduce interest rates.
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Banks worry about facing risks when the economy is in trouble |
However, Mr. Tung highly appreciated the Government's direction in issuing solutions to remove difficulties for the real estate market, corporate bonds, public investment disbursement... as well as the banking industry's solutions in stabilizing the system and providing capital for the economy.
In particular, the issuance of Circular 02/2023/TT-NHNN by the State Bank of Vietnam on debt restructuring not only helps businesses but also helps banks extend provisions, helping both businesses and banks overcome difficulties.
Also stating that the banking industry is facing many difficulties, Mr. Nguyen Quoc Hung, General Secretary of the Vietnam Banking Association, commented that the State Bank is currently “walking a tightrope”, both managing the macro economy, controlling inflation, and supporting businesses.
"If today businesses put all their difficulties on banks, in the future when banks are in trouble, businesses will also face difficulties," Mr. Hung warned.
According to him, although Circular 02/2023 on debt deferral is good news for both banks and businesses, if not careful, the economy's difficulties will be concentrated on commercial banks.
State Bank “breathes a sigh of relief” despite great pressure
From the perspective of state management, Ms. Duong Thi Thanh Binh, Deputy Director of the Monetary Policy Department (SBV), said that in 2022, the pressure on exchange rates and the foreign exchange market will be very high due to unusual and very strong fluctuations in the world economy.
Not only that, for Vietnam, the SCB and Van Thinh Phat cases have increased expectations of VND devaluation, putting pressure on monetary policy management.
“We have to increase the amplitude and interest rates to ensure flexibility in monetary policy management. As a result, VND is one of the currencies with a much lower depreciation amplitude than other domestic currencies, the exchange rate does not fluctuate as much as other countries, and market activities are smooth,” said a representative of the State Bank.
By 2023, when the pressures have eased, central banks of countries and the Fed have gradually reduced the amplitude and intensity of interest rate increases, domestic currency supply and demand have improved, and with management solutions, the exchange rate has stabilized and the market is smooth. In addition, the State Bank also bought a large amount of foreign currency to increase foreign exchange reserves.
“Everyone may find it normal, but those at the State Bank have breathed a sigh of relief, we have also gained more experience over the past time. Besides, the market's confidence in the State Bank's operations has also been strengthened,” Ms. Binh shared.
However, the representative of the State Bank said that, facing the difficulties of businesses and the economy, the State Bank and the system of commercial banks are currently under great pressure to reduce interest rates and increase capital supply to the economy.
The policy of the State Bank is to promote safe and effective growth while improving credit quality, focusing credit on a number of priority areas. Recently, the State Bank has required commercial banks to create conditions for people and businesses to access capital more easily.
However, if a business wants to borrow capital, it must meet the requirements, demonstrate its capacity, and operate effectively and efficiently. In addition, the credit/GDP ratio in our country is still very high. Therefore, it is necessary to reduce dependence on bank credit, otherwise it will be difficult to reduce interest rates.
“This depends not only on the State Bank but also on restructuring the economy, enhancing business energy, and improving the quality of the capital market,” said Ms. Binh.
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