Information on results in credit management and orientations for remaining months of 2022
Since the beginning of 2022, the world inflation has risen sharply due to significant increases of commodity and material prices, fueled by the Russia-Ukraine conflict and the disruptions in the global supply chains. The high inflation pressures have affected many people’s lives and the foundation of macro-economic stability in many countries, forcing most of the world leading central banks to conduct measures of tightening the monetary policy and increasing the key interest rates in order to control the inflation.
In that context, right from the beginning of 2022, in order to contribute to implementing the target for the economic growth of 6 to 6.5%, the average inflation of 4% as set by the National Assembly and the Government, in Directive No.01/CT-NHNN dated January 13, 2022, the SBV continued with its management of granting credit growth targets to each and every credit institution, with the goal for the credit growth of the whole banking system of about 14%, with the appropriate adjustments in line with the practical developments and situations; instructed the credit institutions to extend credit in a safe and sound manner, focusing credit on production and business operations, and priority areas as directed by the Government; strictly controlling credit for potentially risky areas; facilitating the people’s and businesses’ access to bank loans. Accordingly, the SBV announced the credit growth targets for 2022 for each and every credit institution on the basis of: (1) the ratings of the credit institutions in accordance with Circular No.52/2018/TT-NHNN (as amended and supplemented); (2) the considerations of several specific factors regarding the implementation of the directions and policies of the Government and the SBV, such as the credit institutions’ participation in the resolution of weak banks; the interest rate reduction to support affected businesses and people; the credit extension for potentially risky areas, etc.
As of August 26, 2022, the credit rose by 9.91% as compared to that of the end of 2021. This was a high increase in comparison with the same periods over the past years, matching the economic growth, providing the needed support for the recovery of many businesses and the economy in the recent months. The credit structure has been directed to focus on production and business operations, priority areas, while credit for potentially risky areas has been controlled strictly in line with the directions in Directive 01.
The announcements and adjustments of the credit growth targets for each and every credit institution, which have been conducted based on the assessments of the operational performance of the credit institutions as required by Circular No.58/2018/TT-NHNN, has contributed to controlling the inflation, maintaining the macro-economic stability, as well as encouraging the credit institutions to improve their governance and operational safety.
On the basis of the latest rating results in line with Circular No.52/2018/TT-NHNN and the operational performance of the credit institutions in 2022, the market developments and the orientations as stated in Directive 01, the SBV has adjusted the credit growth targets in 2022 for those credit institutions which have requested to do so, and has made announcements to the relevant credit institutions. In the coming months, the SBV would continue the management in line with the tasks as mentioned in Directive 01, facilitating the people’s and the businesses’ access to bank loans in order to support the economic growth recovery.
Translated by Le Hang