Credit demand recovered slightly in the first six months of the year.

On July 15, the Department of Forecasting and Statistics (State Bank of Vietnam) announced the results of the "Investigation on credit trends of credit institutions". The survey results showed that in the first 6 months of 2024, credit institutions said they met the total loan demand of customers at a higher rate than the same period last year but still lower than the last 6 months of 2023.

Credit institutions expect overall customer credit demand to improve in the second half of the year.

The rate of credit institutions assessing that they meet the group's loan demand at a high level (75% or more) 14 commercial banks The materiality in this period continues to be 100%.

To facilitate businesses and people to access credit capital, in the first 6 months of the year, credit institutions reported a tendency to "remain unchanged" or "slightly loosen" credit standards as expected in the survey for the last 6 months of 2023. This trend was recorded in the following areas: Loans for investment in high technology applications; loans for investment in supporting industries; loans for home purchase; loans for investment in logistics services; processing and manufacturing industries; loans for import-export business; loans for investment, tourism business and individual customers.

Credit institutions also reduced the trend of "tightening" credit standards for the following areas: Securities investment and trading; real estate investment and trading; finance, banking and insurance; and construction.

Credit institutions expect that the trend of slightly "loosening" credit standards in the last 6 months of the year will be greater than in the first 6 months of the year.

Accordingly, credit standards are expected to be "loosened" for all customer groups and most sectors, except for 4 sectors: Real estate investment loans; securities investment loans; finance, banking and insurance loans; construction is expected to continue to be "tightened" but the "tightening" trend is narrower than in the first 6 months of 2024.

Regarding the overall credit demand of customers, credit institutions believe that it will only recover slightly in the first 6 months of 2024, much lower than the expected level recorded in the previous survey. Therefore, credit institutions expect the overall credit demand of customers to improve better in the second 6 months of 2024, focusing on the group of corporate customers and the loan demand of the processing and manufacturing industry.

For the whole year of 2024, the rate of credit institutions in this survey expecting the overall credit demand of customers to "increase" compared to 2023 is 79.4% (lower than the rate of 82% in the previous survey).

Meanwhile, factors that may negatively affect credit demand in the coming time are pointed out by credit institutions as: Unfavorable developments in the real estate market; customers' ability to use alternative financial sources; and decline in consumer confidence.

Credit institutions also pointed out 4 driving forces. credit growth The strongest sectors in 2024 and expected in 2025 are: Wholesale, retail; export, import; steel and other metals; processing and manufacturing industry.

In addition, according to the assessment of credit institutions, the credit risk of loans is expected to continue to "increase" in the first 6 months of 2024 and is forecast to continue the "slightly increasing" trend in the next 6 months and the whole year of 2024, but the growth rate is forecast to slow down much compared to 2023.

In particular, the credit risk of real estate investment loans had the highest rate of credit institutions assessing "increase" in the first 6 months of 2024, followed by the credit risk of securities investment loans, however, the rate of credit institutions assessing the risk of these two areas as "increase" was lower than the rate of credit institutions forecasting in the previous survey.

Source