VietNamNet Bridge – Though the mobilized capital was 10 times
higher than the lent capital in the first eight months of the year, a lot of
commercial banks are still intensively seeking capital by offering high deposit
interest rates. Where has the capital been going to?
The documents released by the
Ministry of Planning and Investment at the press conference in early September
showed the continuous disbursement of the banks in the first eight months of
the year. By August 20, the total money supply (M2) has reportedly increased by
10.3 percent in comparison with December 31, 2011. While the outstanding loans
had increased by 1.4 percent, the deposits at banks had increased more sharply
by 11.23 percent.
However, despite the credit
slowdown, commercial banks still have been making every effort to attract more
deposits. Some banks have launched promotion programs, promising gifts to
depositors, while others illegally break the laws, offering the deposit
interest rates higher than the ceiling rate set up by the State Bank at nine
percent per annum.
Observers believe that banks
would not use the capital to invest in securities or real estate projects,
because of the high risks of the investment channels. The banks are not likely
to use the money to buy gold, since the State Bank of Vietnam has requested to
stop mobilizing and lending in gold. Hoarding dollars proves to be not a wise
choice, because the dong/dollar exchange rate has been stabilized for a long
time.
There could be two reasons that
explain why banks still keep mobilizing capital. First, banks use the money to
be raised from the public to buy government bonds. Second, they try to seek
more capital to improve their liquidity.
A report by Bao Viet Securities
Company about the bond market in the first half of 2012 showed that the State
Treasury successfully issued 54,824 billion dong worth of government bonds in
the first six months of the year, and 7894 billion dong worth of treasury
bills. As such, the State successfully sought 62,718 billion dong worth of
capital, fulfilling 62.7 percent of the yearly plan, which represented the 49
percent increase if compared with the same period of the last year.
The secondary market has been
warmed with the total trading value reaching 74,646 billion dong, or 2.43 times
higher than the same period of the last year. Domestic banks remain the major
members of the market with 18 banks, or 50 percent of the members, buying
government bonds worth 37 trillion dong, or 67.8 percent of the issued bond
value.
Meanwhile, according to the State
Bank, the total outstanding loans of the national economy have reached 2617
trillion dong, while the loans provided in the first half of the year had
reached 20 trillion dong. The figures show that the sum of money poured by
commercial banks into government bonds in the first half was twice as much the
sum of money additionally pumped into the national economy during the same
time.
A banking expert in HCM City said
banks now have profuse short term capital; they still keep cautious in the
disbursement for the fear about bad debts. The bad debt increases have led to
the banks’ hesitance to make transactions on the interbank market.
Regarding the banks’ efforts to
improve liquidity, Dr Le Dat Chi from the HCM City Economics University has
affirmed that while most of the banks have reported strong liquidity, some
banks are still in bad conditions, which have to seek more capital to ensure
the liquidity.
Compiled by Thu Uyen
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