At a banking sector conference themed “Boosting credit growth in 2024” held on June 19, the State Bank of Vietnam (SBV) reported that industry-wide credit growth by the end of May had reached 2.41 per cent compared to the end of 2023, but by June 14, it had reached 3.79 per cent, showing a strong upward trend in just two weeks.
The SBV assessed that the pace of credit growth has gradually improved month by month. Notably, the credit volume supplied by financial institutions to the economy in nearly the first half of 2024 exceeded the volumes of the same period over the past three years.
However, in some localities, credit growth remains low, and some financial institutions have reported credit growth lower than the industry average, with some even experiencing negative growth.
“This indicates that overall domestic credit demand has not recovered strongly, with production and service sectors, which are traditional drivers of the economy, still facing certain difficulties. A segment of customers with credit demand have yet to develop viable business plans or meet loan conditions, coupled with shifts in consumer trends,” said an SBV representative at the conference.
While the overall outlook is positive, growth drivers within the commercial banking system are showing deep differentiation. Growth leadership is thus expected from banks proactively managing substantial resources with favourable balances.
Meeting these safety limits, the advantages are concentrated at several large commercial banks like Techcombank, HDBank, and ACB, where the loan-to-deposit ratios are well below the 85 per cent threshold, such as 78.5 per cent at Techcombank and nearly 71 per cent at HDBank. This indicates significant room for growth.
At ACB and HDBank, the latest financial reports show favourable balance positions, with the ratio of short-term funds for medium- and long-term loans maintained at 20-25 per cent, providing ample resources to drive growth.
At HDBank, the capital adequacy ratio (CAR) continued to rise to 13.8 per cent at the end of Q1, while operational efficiency remained solid in a leading industry position, with return on equity (ROE) increasing from over 24 per cent to 26.7 per cent.
Similarly, at Techcombank, the CAR has held at around 15 per cent in recent updates, the ROE has decreased but remains favourable at 15.6 per cent, and the ROA continues to be high at 2.5 per cent.
Based on this data, the commercial banking sector possesses more significant growth space and momentum than the state-owned commercial banking sector.
This group is well-positioned and expected to lead the overall growth trend in the last six months of the year, after demonstrating comprehensive growth rates in Q1 with more positive news anticipated to follow in Q2.
