Permanent Vice Chairwoman and CEO of Sacombank, Nguyen Duc Thach Diem – Photo: VGP/Nhat Bac
Sacombank’s credit growth has not yet met expectations
At the conference of the Government’s Standing Committee with joint-stock commercial banks on the afternoon of September 21, Permanent Vice Chairwoman and CEO of Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank) Nguyen Duc Thach Diem said that as of August 31, the bank’s outstanding loans for production and business reached VND347 trillion, an increase of nearly VND25 trillion, accounting for 67% of the additional outstanding balance.
Loans to five priority sectors reached nearly VND165 trillion, up VND15 trillion from the beginning of the year. Loans to the real estate sector reached VND104 trillion, up VND9 trillion or 9.8%, of which nearly 50% of the outstanding balance was for real estate consumption loans. Consumer loans reached more than VND57 trillion, up over VND3 trillion, or 6.2%.
According to Ms. Nguyen Duc Thach Diem, Sacombank has implemented many solutions to promote safe and effective credit growth, including tightly managing capital costs, reducing deposit interest rates by 1.2% from the beginning of the year, thereby reducing lending interest rates by nearly 1.5%. In fact, the disbursement interest rate at Sacombank is currently only around 7.5%/year (in which personal customers are 7.9% and enterprises are 7%).
Regarding the causes and difficulties that have led to slow credit growth, according to Sacombank’s leader, although many solutions and mechanisms have been applied to promote credit growth, the credit growth of the whole industry in general and Sacombank, in particular, has not yet met expectations due to some difficulties such as: Capital demand remains low as exports and domestic consumption have not recovered; Many enterprises have downsized their production scale and are cautious about risks, so they have not actively used loans.
In addition, the income of real estate buyers has decreased, while the supply of affordable housing to meet the needs of home buyers has not been met. Real estate companies/projects are still facing difficulties due to incomplete legal procedures and seriously deteriorated financial capacity.
Apart from the factor of people’s income reduction due to economic difficulties, the explosive development of lending applications with loose lending conditions and no collateral requirements has also divided the consumer credit market share, causing slow growth in consumer credit.
Proposing to maintain an expansionary fiscal policy to stimulate aggregate demand
At the conference, Ms. Nguyen Duc Thach Diem proposed some solutions and recommendations to promote credit growth.
In terms of solutions, Ms. Diem suggested that it is necessary to continue reducing capital costs and lowering the lending interest rate floor to enhance capital accessibility. Implement preferential credit packages for some sectors and industries that need to be promoted according to the direction of the Government and the State Bank.
Continue to coordinate with industry associations (such as the Real Estate Association, Cashew Association, Coffee Association, and Macadamia Association) to deploy mechanisms for preferential products and interest rates to help customers access cheap capital and increase outstanding loans.
Enhance measures to improve the effectiveness of risk management to control credit risk at an appropriate level with the credit growth target.
Streamline internal procedures and regulations in credit granting; Apply technology to products and services to reduce transaction time, enhance customer experience, and increase transaction safety.
Ms. Nguyen Duc Thach Diem proposed to continue maintaining an expansionary fiscal policy to stimulate aggregate demand to promote growth. Implement tax and fee reduction solutions to directly support consumption demand and increase the purchasing power of the economy.
In addition, there should be communication from the State to create a sense of reassurance, necessity, and promotion of the safety and convenience of digital transaction channels so that all people can respond and act upon it.
Moreover, intermediary payment organizations should consider reducing fees to join hands with commercial banks to waive fees for users.
Finally, it is necessary to improve the legal system related to the handling of secured assets according to the Law on Credit Institutions of 2024 (promulgating decrees and circulars for guidance and considering alternative measures to seize secured assets). At the same time, provide more detailed guidance on initiating lawsuits regarding consumer lending without collateral through applications.
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