VIETNAM: According to the State Bank of Vietnam (SBV), total outstanding bank loans in the real estate market totaled more than VND2,280 trillion (US $98.032 billion) as of late April, a 10.19 percent increase from late 2021.
This figure accounted for 20.44 percent of total outstanding loans in the economy, with a bad debt rate of 1.62 percent. The SBV is closely monitoring credit growth and quality in real estate and the stock market in order to intervene timely, if necessary, for the banking sector’s safety.
While an estimated 94 percent of outstanding loans in the real estate sector are of the mid- and long-term variety, Hong noted that those mobilized by the bank are of the short-term variety.
This trend has been exacerbated by the real estate market’s high volatility and price manipulation. “All of these factors make it difficult for credit institutions to evaluate the mortgage,” she explained.
“Differences in the maturity period and interest rates of the financing sources mean loans in this field are of high risk to the banking sector,” said Ms. Nguyen Thi Hong, governor of the central bank.
According to the Hanoi Times, the State Bank of Vietnam (SBV) will continue to tighten credit in risky areas such as real estate and the stock market.
A report submitted to the National Assembly, an estimated 94 percent of outstanding real estate loans are of the mid- and long-term variety, but those mobilized from the bank are of the short-term variety.
As of May 31, Vietnam’s credit growth was 8.04 percent higher than it was in late 2021 and 16.94 percent higher year on year.