The State Bank of Vietnam (SBV) held a conference to take stocking of banking operations in the first half of 2015 and task implementation of the banking sector in the second half of 2015 in Hanoi on June 24.
hnghi
The conference chaired by SBV Governor Nguyen Van Binh was attended by the other members of the SBV Management Board, representatives from the Financial Supervision Agency, SBV entities, Directors of SBV municipal and provincial branches, and Chairmen of the Board of Directors and General Directors from credit institutions, and attendants from the Vietnam Banks Association, the Vietnam Bank for Social Policies, the Vietnam Development Bank, the Vietnam Cooperative Bank, the Deposit Insurance of Vietnam, Finance Companies, Leasing Companies, joint- venture banks, foreign bank branches, wholly foreign – owned banks, and others.
In his keynote speech, Governor Nguyen Van Binh said that the banking sector achieved significant results in the first 6 months, contributing to socio- economic development and economic growth. He added that with the administration and implementation of monetary policy in an active and flexible manner, the banking industry has significantly contributed to the macro-economic stability. He said that the achievements in the first 6 months reflected that the operational orientation of the banking sector for 2015 is appropriate and useful to encourage the implementation of the defined tasks in the coming time.
According to the SBV Governor, the common interest rate is currently at a reasonable level, the liquidity of commercial banking continues to be improved; the mobilizing interest rates for over 6 month terms declined 0.2 – 0.5 percentage point p.a, thereby facilitating for a decrease in lending interest rates for long and medium term loan. The lending interest rates declined by 0.2 - 0.3 percentage point p.a, of which the lending interest rates for medium and long term loans decreased by 0.3 percentage point p.a. In the last 6 months, the banking industry strives to stabilize the mobilizing interest rates, reduce the lending interest rates, especially reducing the lending interest rates for medium and long term loans by 1.0 – 1.5 percentage points p.a.
Regarding to the exchange rate management, in the first 6 months of 2015, the SBV adjusted the VND/USD exchange rate up by 2%. Currently, the trade deficit is not large while the other sources of foreign currencies to Vietnam is still positive, therefore, the balance of the economy is still in surplus, the international reserves of Vietnam have increased, the adverse impacts from international capital and money markets on the domestic market are unsignificant. These are favorable conditions for the SBV to continue stabilizing the VND/USD exchange rate from now to end 2015.
Unlike the previous years, the credit growth in 2015 has shown positive signs since the first months. In the first 6 months, credit growth was over 6% as compared to last year. It is expected to reach 13 – 15% at end 2015. The SBV may adjust the target credit growth up to 17% to boost the economic growth. Along with the growth of credit, credit measures will be implemented in order to improve credit quality for providing capital for production and business, especially for the priority sectors. Moreover, the SBV will strictly control credit investment in the fields that are easy to be speculated, thereby affecting the domestic market stability.
In the first 6 months of 2015, credit institutions actively promoted the implementation of restructuring in line with the scheme approved by the SBV. The SBV has strictly taken several solutions to deal with weak credit institutions in accordance with law together with ensuring the safety of credit institution system, stabilizing the money market and psychology of depositors. In addition, the SBV has speeded up the implementation of merging and acquitization of credit institutions in parallel with encouraging the participation of the state-owned commercial banks and several large joint - stock commercial banks in order to extend the operational scale of the commercial banks.
Regarding to NPL resolution, the SBV has decisively directed credit institutions to proactively focus their resources on speeding up this process. In the last 6 months of 2015, commercial banks shall have to concentrate more on NPL resolution, specifically on classifying NPLs in accordance with applicable regulations, making sufficient risk provision, proactively selling debts for the Vietnam Asset Management Company (VAMC)… for the aim of reducing NPL ratio to below 3% by Quarter III of 2015. Supporting to these efforts, the SBV will take various measures to mobilize those banks that have positive solutions in dealing with NPLs and strictly handle with those credit institutions having high NPL ratio. At the conference, the SBV Governor also stated that in the first 6 months of the year, the banking sector well implemented program of connecting banks and enterprises, program of poverty reduction, and the information and communication, hence creating public concensus and confidence in banking performance.
In the final 6 months of 2015, the SBV will continue to manage the monetary policy in a proactive and flexible manner, closely combine with the fiscal policy for the aim of controlling the inflation, stabilizing the macro-economy, maintaining the economic growth at a proper level, ensuring the liquidity of credit institutions and the economy. The main orientations are as follows: flexibly managing the open market operations and interest rates in consistent with macro-economic and monetary policy objectives, and money market stability; Continuing to stabilize the exchange rate within the set band; Focusing on operating credit measures in a flexible manner towards credit extension together with credit safety and quality, ensuring the supply of capitals to the economy, creating favorable conditions for getting access to bank loans; Continuing to conduct measures to closely monitor the forex market in order to stabilize the exchange rate, improve the international balance of payment, increase the state foreign exchange reserves; Focusing on conducting credit solutions to achieve the credit growth for 2015; Continuing to accelerate the restructuring of credit institution system and NPL resolution, making the performance of credit institutions healthy, and ensuring the safe banking sector and reducing the NPL ratio to below 3% at end 2015.
To concluding the conference, SBV Governor Nguyen Van Binh highly appreciated the efforts of SBV entities in the implementation of the directions and management measures of the SBV Management Board and the accountability of the system of credit institutions in proactive implementation of common activities of the banking sector. The SBV Governor required, in the second half of 2015, all entities of banking sector to promote the obtained achievements, continue to take the advantages and proactively overcome the difficulties, contributing more actively to accomplishing political tasks of banking sector, especially for the two prioritized tasks of NPL resolution and restructuring credit institutions.
TLH - LVH