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VND115tril in real estate loans disbursed   2008-10-07 - TBKTVN

The outstanding real estate loans of the whole banking system had reached VND115,500bil ($975mil) by September 2008, accounting for 9.15% of total outstanding loans, according to the State Bank of Vietnam.


In HCM City, the real estate loan ratio had reduced to 10% by August 30 from 19% at the beginning of the year.


The General Director of a bank said that his bank has stopped funding real estate projects and only lends money to fund individuals’ purchases.


As the lending interest rate increased sharply in the first six months of the year, real estate loans have been narrowed.


ABBank said that its outstanding real estate loans have decreased gradually. The bank continues to provide loans for people who have real demand for houses and apartments, but the number of clients proves to be modest.


ACB has resumed real estate loaning after three months of interruption. However, the bank only gives loans to individual clients who purchase houses and apartments by installment and who have stable incomes.


Ly Xuan Hai, General Director of ACB, said that real estate loaning just accounts for a small proportion of the total outstanding loans of the bank.


Hai said that the bank does not intend to expand real estate credit by funding real estate projects, while it only focuses on consumer credit (funding clients’ house purchases or repairs). Therefore, Hai said that land and house prices decreases are not really worrying.


Hai said that the bank has reserved VND50bil to disburse for real estate loaning.


More and more banks have been trying to push up real estate loaning as their capital has become more profuse. However, it is not so easy to disburse at this moment as it was in 2007. The overly high interest rates have been keeping clients away from loans.


Meanwhile, a lot of people think that the real estate market will continue falling down on the risk of increasing bad real estate debts. Banks will sell more mortgaged assets in the upcoming months when real estate credit contracts mature, while the real estate market will stay frozen.


According to Ho Huu Hanh, Director of the HCM City Branch of the State Bank of Vietnam, said that banks have been keeping cautious with real estate loans. Right after banks saw signs of the falls of the real estate market, they tried to collect debts and reduce real estate loaning. This explains why outstanding real estate loans have been decreasing for the last few months.


Tran Phuong Binh, General Director of East Asia Bank, shared the same view, saying that one should not be too worried about banks’ real estate loans. Binh said that the monetary market has become stabilised, while banks always apply necessary measures to prevent risks in loaning.


In related news, the latest report by the HCM City branch of the central bank showed that local banks had mobilised VND542tril so far this year, an increase of 27.2% over the same period of last year, and 11.3% over the beginning of the year.


The total outstanding loans of local banks have reached VND484tril, an increase of 19.1% over the beginning of the year.

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