Credit grows 1 pct in January, deposits lag: Vietnam central bank

Credit grows 1 pct in January, deposits lag: Vietnam central bank

Loans in the banking system expanded 1 percent in January compared to December last year, the State Bank of Vietnam said Thursday in a report published on its website.

Deposits during the period only increased by 0.3 percent, raising more concerns over liquidity problems at the lenders, it said. Many banks have raised interest rates on dong deposits to 10.499 percent a year, almost touching the rate cap of 10.5 percent set by the central bank. Some lenders have also offered bonus rates and other incentives but they have still found it hard to attract deposits, especially long term ones. According to the central bank branch in Ho Chi Minh City, short term deposits now account for 70 percent of total funds that banks in the city can attract. The central bank’s report said liquidity on the currency market improved last month after state-owned companies sold foreign currencies to lenders. Vietnam’s major state-owned firms have sold $450 million to commercial banks to ease a dollar shortage, the government said early this week. Source: Thanh Nien