Central bank urges caution over stock collateral lending (08/08)
06/08/2010 - 157 Lượt xem
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The volatility of securities market has spurred the State Bank of Vietnam (SBV) to draft guidelines for commercial banks on mortgage lending, Nguyen Ngoc Bao, director of the SBV’s Policy Department said, adding that SBV would not directly intervene. With the stock market falling 200 points since May and the value of many shares falling some 30 percent in the last two months, Bao believes the practice just has too many risks. He said credit institutions should increase lending to production and enterprises instead. However, lenders maintain that loans remained safe despite the volatility of the securities market over the past two months. Vietnam International Bank (VIB) deputy director Trinh Thanh Binh said VIB’s lending to stock investors has been stable, only 5 percent of the bank’s total loans. Binh said that the VIB securities division was closely monitoring the stock market to require stock mortgagors to increase their mortgaged assets or to repay a portion of their loans if the value of the mortgaged stock falls 15 per cent within a week. With lending to stock mortgagers representing only one percent of total bank assets, Asian Commercial Bank (ACB) director Ly Xuan Hai said the current situation did not worry him. ACB would adjust its lending rate if the value of mortgaged stock slid 25 percent, he said. Instead of lending only against bank stocks as previously, VIB has now provided loans against 29 different types of stocks ranging from shares in hydroelectric plants to insurance and information technology stock, Binh said. Hai said ACB has also lent against more than 30 kinds of stocks, of which 20 were unlisted for six years since it began making loans against such collateral. Lending against stocks has proven more secure that loans made against collateral of machinery and equipment, Hai said. |
