Vietnam News Network

Vietnam News: Local, National, Business, Sport, Entertainment and Technology

Trade ETHUSD, Bitcoin and Cryptocurrencies

BUY & SELL ETHUSD | View ETHUSD News & Updates

Buy Sell ETHUSD, Bitcoin and Cryptocurrencies

Vietnam banks more cautious, HSBC country head says   2008-05-27 - TuoiTre

Vietnamese banks are increasingly hesitant to provide loans for real estate investment as rising interest rates have amplified the risk of defaults, said the head of HSBC Vietnam


Despite setbacks, Goldman Sachs says country’s economy ok for the long-term  
“With interest rates going up, liquidity being tight, it’s only prudent to constrain lending to those with fundamental projects rather than to speculative purposes such as property development,’’ said Thomas Tobin, HSBC’s chief executive officer in Vietnam, this week.

The benchmark stock index (VNIndex) has fallen for 15 straight sessions, tumbling 18 percent since April 29, as concerns have mounted that soaring interest rates would cripple Vietnam’s economic expansion.

Banks have been extending loans at rates as high as 22 percent to make a “meaningful profit,” said fund manager Vinacapital Investment Management Ltd. last week.

Vietnam’s credit growth reached 50 percent last year as banks extended loans to retail investors buying securities while a real estate boom fueled demand for mortgages.

The credit expansion, coupled with rising commodity and energy prices, pushed inflation in the Southeast Asian nation to its highest point in at least 15 years.

Prime Minister Nguyen Tan Dung has recently asked the central bank to focus interest-rate policy on fighting inflation, suggesting the government is more concerned about rising prices than economic growth.

The central bank on May 19 boosted its base rate to 12 percent from 8.75 percent, and commercial banks raised borrowing costs the same day.

Vietnam’s economy

HSBC, the world’s third-largest bank by market value, owns 15 percent of Vietnam Technological and Commercial Joint Stock Bank.

The London-based bank in December 2005 agreed to pay $17.3 million for a 10 percent stake.

It has agreed to raise the holding to 20 percent, pending government approval.

As loans dry up, the Ho Chi Minh City Stock Exchange’s VN-Index has tumbled 53 percent this year, making it Asia’s worst performer.

Residential prices in Ho Chi Minh City have dropped as much as 40 percent since the end of last year, according to Morgan Stanley.

Vietnam’s economy expanded 7.4 percent in the first quarter from a year earlier.

Last year, gross domestic product grew 8.5 percent, the fastest pace since 1996.

‘Good story’

 Vietnam’s “strong growth potential’’ hasn’t been diminished by its current difficulties, said Helen Qiao, an economist at Goldman Sachs Group Inc. in Hong Kong, in a Bloomberg Television interview on May 21.

“Things are tougher than they were before, but Vietnam really has a good story in the medium and long term,’’ said Tobin, citing the nation’s infrastructure and a young and skilled workforce.

Asia Commercial Bank has slumped 66 percent this year in Hanoi trading.

Saigon Thuong Tin Commercial Joint-Stock Bank (Sacombank) has fallen 60 percent on the Ho Chi Minh Stock Exchange.

The two lenders are the only listed Vietnamese banks.

HSBC isn’t planning to take advantage of falling valuations to make acquisitions in Vietnam, said Tobin.

“There probably are opportunities if you look at the prices,’’ he said.

“We aren’t really looking around.’’

Other news

Massive foreign tourism project breaks ground in Ba Ria-Vung Tau   2008-05-27

Chock-a-block port causes headache for importers   2008-05-27

Banks, borrowers struggle with tighter credit   2008-05-27

Real estate market to remain lackluster for 1.5 more years: experts   2008-05-27

Solutions to stabilise real estate market   2008-05-27

WB approves US $502 million loan for three projects   2008-05-26

New shares should be discounted – fund   2008-05-25

azprom to explore Vietnam’s offshore fields   2008-05-25

Banks set up shared ATM service   2008-05-25

TBKTSG - The downside of price control   2008-05-25

TBKTSG - Vietnam draws over 14.7 billion USD in FDI   2008-05-25

TBKTSG - VN becomes Germany’s 2nd largest coffee exporter   2008-05-24

Vietnam greenlights $4.2-bln casino-resort in south   2008-05-23

Gold makes a comeback on higher oil, anemic dollar   2008-05-23