Vietnam's credit growth this year could reach 5-6 percent, farbelow government projections, with the banking industry expectedto face more difficulties in the last three months, Vietcombank
Securities said on Monday.
Loans as of Sept. 20 edged up just 2.35 percent from the endof 2011, while small banks could face a liquidity crunch latethis year, the Hanoi-based brokerage said in its quarterlyreport for the July-September period.
Vietnam initially aimed for an annual lending expansion of15-17 percent for 2012, against a growth of 14.4 percent for theprevious year, but loans have been growing slowly, partly due tohigh interest rates and banks trying to avoid bad debt.
In June, a government minister projected the annual lendingexpansion at 12-13 percent.
"The question lies in the bad debt in the banking system andthe health of the economy, which will shape corporateperformance and their borrowing," said the brokerage, which isan affiliate of Hanoi-based Vietcombank.
The government has not adopted any measures so far to dealwith bad debt, while macro conditions have not shown signs ofsustainable recovery, it noted.
The outlook for the stock market is cautious and nobreakthroughs are expected in the last quarter, the report said.
(Reporting by Vu Duy; Editing by Ho Binh Minh)
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Keywords: MARKETS VIETNAM STOCKSNEWS/BANKS