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...] about Banks circumventing rules on real estate loans
Real estate loans
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...] about Banks to face stricter rule on real estate loans
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...] about Vietnam banks to tighten real estate loans next year under new rules
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...] about Hanoi: outstanding real estate loans reach VND24,839bil
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...] about Local banks stop real estate loaning, foreign banks jump on the bandwagon