Relevant authorities should further monitor consumer lending as real estate loans were hidden in consumer loans, experts told Viet Nam Television. State Bank of Viet Nam (SBV) Deputy Governor Nguyen Thi Hong. According to State Bank of Viet Nam (SBV) Governor Nguyen Thi Hong, outstanding loans in the real estate area have slowed down compared with 2016, thanks to the resolute instruction of SBV’s governor to credit institutions on controlling credit risks, ensuring balance of capital, maintaining ratio of using short-term funds for medium- and long-term lending and controlling credit in risky areas such as real estate and build-operate-transfer transport projects. Not only has the real estate credit growth declined, the proportion of real estate loans in the total outstanding loans of the entire banking system has also fallen to just over 8 per cent, the SBV reported. However, a recent report from the National Financial Supervisory Commission (NFSC) showed that … [Read more...]
SBV to control real estate loans
Photo taken of villas at Ha Noi's Duong Noi Urban Area. Outstanding loans in the country's real estate sector totaled $16 billion last year. — VNS Photo Doan Tung HA NOI (VNS) — The central bank will control property loans to limit risks this year, an official told a meeting in HCM City late last week. State Bank of Viet Nam deputy governor Nguyen Phuoc Thanh said that although credits grew positively with the majority of loans poured into production and business activities last year, many banks pumped too much capital into the real estate market. Xay Dung, a Ministry of Construction newspaper, reported that property loans grew by 18 per cent year-on-year last year, as commercial banks accelerated financing both property developers and homebuyers. According to the central bank's credit department, outstanding loans in the real estate sector total about VND360 trillion (US$16 billion), a rise of 80 per cent from the figure recorded three years ago. "What's worrying, many … [Read more...]
Banks to face stricter rule on real estate loans
Banks to face stricter rule on real estate loans By Thuy Trieu - The Saigon Times Daily HCMC – Banks have already refrained from making property loans due to difficulties in raising middle and long-term funds and their customers will find it even harder to gain access to real estate loans when a new central bank rule takes effect in early October. Circular 13/2010/TT-NHNN issued by the State Bank of Vietnam requires the risk reserve ratio for real estate and stock loans to rise to 250% of the loans from the current 100%. This means a higher proportion of risk reserve for property loans will affect the capital adequacy ratio (CAR) of banks, at 9% or higher. Those banks acting as retail ones are in the position of boosting real estate loans given strong demand. To meet the CAR requirement, lenders will have no choice but to either reduce real estate and stock loans, or increase their capital. The general director of a joint-stock bank said that if giving out a property loan of … [Read more...]
Vietnam banks to tighten real estate loans next year under new rules
Vietnam’s central bank has announced new restrictions on real estate lending in an attempt to prevent bubble risks in the property sector. In a circular released on Friday, the State Bank of Vietnam said it will raise the risk weight of loans to real estate businesses from 150 to 200 percent on January 1, 2017. According to the circular, commercial banks will also be prohibited from using more than 50 percent of short-term deposits for medium and long term loans from January 1, 2017. The current rate is 60 percent. The ratio will be reduced to 40 percent from January 1, 2018. These amendments are not as strict as the central bank’s original plan, which intended to raise the risk weight for real estate loans to 250 percent and prohibit banks from using more than 40 percent of short-term deposits for medium and long term loans. Earlier, property companies and housing officials and experts requested the central bank to cut real estate lending “gradually,” otherwise … [Read more...]
Hanoi: outstanding real estate loans reach VND24,839bil
The Hanoi Times - Outstanding loans for the real estate sector had reached VND24,839bil ($1,461mil) by the end of October 2008, an increase of 23.5% over December 2007, accounting for 10% of total outstanding loans of local banks, according to the Hanoi branch of the State Bank of Vietnam (SBV). According to Nguyen Hong Ky, Director of the Hanoi Branch of SBV, in the first ten months of the year, the total sum of outstanding loans dispensed by credit institutions in the city for the national economy was VND246tril, an increase of 32.2% over the same period of last year, and 20.9% over the end of 2007. As far as real estate credit, commercial banks continued disbursing money for projects such as constructing offices for lease and developing urban areas. Outstanding loans in the field by the end of October 2008 had reached VND24,839bil, representing an increase of 23.5% in comparison with December 2007, or 10% of total outstanding loans of the banks in the capital city. The ratio of … [Read more...]
Local banks stop real estate loaning, foreign banks jump on the bandwagon
Hanoi Times – While local banks are turning off the ‘real estate credit valve’ as requested by the State Bank of Vietnam, foreign banks are trying to increase credit. Recently, several domestic banks have resumed real estate loaning, but they only give loans in dribs and drabs. only loyal clients can access bank loans, while individual clients seem to have no way to get bank loans. Dang Van Thanh, Chairman of Sacombank, said that it would be very risky to use short term capital for long term loans, while real estate loaning is a kind of long term credit. Therefore, Sacombank, though having profuse capital, still limits real estate loaning. According to Tran Anh Tuan, Director of the HCM City Housing Development Bank, his bank follows very strict policies in funding real estate purchase deals in order to limit lending to speculators. The bank only provides loans to the projects that get investment licenses already. Meanwhile, Asia Commercial Bank (ACB) … [Read more...]
Real estate loans strongly increase
Credit for the real estate sector has witnessed good growth - Photo: Can Dung Safe growth The Ministry of Construction’s report shows that total value of real estate inventories reached around VND59.395 trillion by September 20, a fall of 53.8 percent compared to the first quarter of 2013. The real estate market has flourished thanks to bank lending. According to the SBV’s Credit Department, credit for the real estate sector has witnessed growth in recent times. However, the growth rate has been unsatisfactory. In particular, growth in real estate loans in the first nine months of this year reached 14.59 percent, while outstanding real estate loans accounted for just 8.05 percent of total outstanding credit. Outstanding real estate loans have focused on segments such as construction, repairs and housing. According to the SBV, although growth in real estate loans in the first nine months of this year was higher than overall credit growth, outstanding real estate loans … [Read more...]
Low-income families wary of preferential real estate loans
A draft regulation by the State Bank of Vietnam (SBV) that allows low-income households an annual preferential loan rate of 6% has not gained much traction among the public. Worries Nguyen Thi Minh, from District 1 in HCM City, said that her family was happy with the regulation but worried about interest rates after the initial three-year period. “It would be great if the 6% interest rate was extended ten years instead of just three. We may not be able to pay off the debt if the interest rates increase after the first three years,” Minh said. Truong Xuan Tam, attorney and Vice Chairman of the Ba Ria – Vung Tau provincial Lawyers’ Association, said even though the 6% interest rate is much lower than the current market interest rates, the three-year term is too short for borrowers to adequately plan to pay off their debts. Le Hoang Chau, Chairman of HCM City Real Estate Association, said, “People are still hesitant apply for the preferential rates … [Read more...]
Real estate loan deals to kickstart credit growth rise
VietNamNet Bridge – A number of banks have unveiled real-estate loan packages targeting feasible property projects and mortgages to intensify credit growth. Oceanbank has launched a package called niem tin (belief) that carries an interest rate of just 5.91 per cent for the first six months. The bank will disburse the loan in stages as the developer makes progress on the construction. A bank spokesperson said the "belief" that banks have in the real estate market and buyers have in developers could help revive the market. "We expect the package to help thaw the frozen market, which has thousands of unfinished apartments," he said. BaoVietBank has launched a loan product that promises to return customers' loan repayments and pay a penalty if their apartment is not handed over in time by the developer. But it is applicable only for the Ha Dinh Tower (Ha Noi) being built by 135 Investment JSC. Besides, most banks also offers loans to fund house repairs. Banks say customers who … [Read more...]
Half of real estate loans in default, minister says
HA NOI (VNS) — Half of the nation's outstanding debt related to real estate was in default, Minister of Construction Trinh Dinh Dung said yesterday. Total outstanding real estate loans, including mortgages and construction loans, reached VND200 trillion (US$9.5 billion) at the end of August, according to figures published by the State Bank of Viet Nam. Yet debts in the sector had now climbed to a total of about VND1,000 trillion ($48 billion), Dung said. The nation's real estate market had developed expansively without planning, resulting in an excess of supply, he said. There were 2,400 projects in progress in 44 cities and provinces on 71,000ha of land, he noted, with Ha Noi alone seeing 368 projects covering 20,000ha. Inventories, meanwhile, included 16,500 apartments, 4,100 low-rise buildings, and 25,800sq.m of office space for lease. Most of this inventory was in high-end and medium-level market segements, while property for low-income earners remained in low supply. Few … [Read more...]