Pham Duc An, Chairman of Agribank’s Council members – Photo VGP / Nhat Bac
Sharing at the New Year meeting with typical State-owned enterprises on March 3, Mr. Pham Duc An, Chairman of Vietnam Bank for Agriculture and Rural Development (Agribank) Council members, said that by the end of 2023, Agribank’s total assets will exceed VND 2 million trillion, mobilized capital reached VND 1,885 trillion and loans reached VND 1,550 trillion, of which loans in the field of agriculture, countryside and farmers accounted for nearly 65%.
According to Mr. An, entering 2024, the international situation is still uncertain, with many complex and unpredictable developments, leading to many consequences; many large economies are still facing many difficulties in growth and inflation control, and even have signs of recession like the UK and Japan. This is negatively impacting the production and business activities of domestic enterprises.
Specifically, although deposit interest rates have decreased significantly, deposits continue to flow into the banking system, but the demand for capital use has decreased due to insufficient improvement in production and consumption needs, causing excess capital in many commercial banks, increasing interest payment costs for commercial banks. For example, at Agribank, currently for every VND 100 deposited, only more than VND 80 can be borrowed, although from the beginning of 2024, Agribank has proactively adjusted downward lending interest rates, implemented credit programs with a scale of over VND 120,000 billion with lending rates lower than those of ordinary interest rates by 2.5-3% to encourage, support customers. Agribank’s income for the first two months of 2024 decreased nearly VND 1,200 billion compared to the same period in 2023.
In the coming time, Agribank said it will proactively continue to balance to strive to continue to reduce lending interest rates, restructure support debts for customers, especially businesses; improve and simplify procedures and processes for loans to enhance access to bank credit. At the same time, proactively deploying synchronous and flexible solutions to promote effective credit growth associated with control and improvement of credit quality, directing bank credit flow to production and business sectors, priority sectors, and enterprises serving the growth motivation of the economy.
Providing recommendations at the meeting with typical State-owned enterprises, Chairman Pham Duc An proposed:
First of all, the difficulties and shortcomings in mechanisms, policies, and barriers related to responsibilities and public ethics need to continue to be clarified and have specific solutions for businesses to confidently and boldly develop.
Secondly, in the current situation, fiscal policies, especially public investment and support for businesses, are the key to stimulating production and consumption, thereby increasing the demand for capital, and the capital of commercial banks will play a role.
The government needs to deploy incentives, support for businesses to transform to meet international trends and standards.
Thirdly, if State-owned enterprises dare to think and dare to do, the management mechanism for capital investment in State-owned enterprises as well as the activities of enterprises need to be renewed, in which enhancing the delegation of autonomy to State-owned enterprises on the spirit of shifting from behaviral management to target management, strengthening supervision, detecting, warning and handling violations from the early stage in order to prevent and minimize damage.
In terms of the target assigned to State-owned enterprises, it is necessary to specify for each type and each specific enterprise, especially the ability to master technology, produce high-value-added imported substitute goods, avoid assigning only business growth and profit targets. Mechanisms for appointment and dismissal of officials in State-owned enterprises also need to be renewed comprehensively.
