In HCM City, the country’s biggest economic centre, by the end of October 2007, the total capital mobilised by commercial banks had reached VND437,000bil ($27.31bil), an increase of 53% over the end of 2006 and 73% over the same period of last year, the highest increase so far.

The mobilised capital has reached VND322,706bil ($20,169mil) in local currency and $7,143mil in foreign currencies, 26.1% of total capital. It is expected that by the end of 2007, the total capital to be mobilised by local banks will reach VND460,000bil ($28.75bil), an increase of 62-65% over the end of 2006.

In Hanoi, by the end of October 2007, commercial banks had mobilised VND326,624bil ($20,414mil), 34.54% more than the end of 2006, the highest increase in the last many years. It is expected by the end of 2007, the total capital to be mobilised by local banks will reach VND350,000bil ($21.87bil), an increase of 42-44% over the end of 2006.

Regarding the capital absorption of the national economy, by the end of October 2007, the total outstanding loans of commercial banks in HCM City reportedly reached VND345,000bil ($21.56bil), up by 50% over the end of 2006, and 63% over the same period of last year.

If classifying the loans in currencies, outstanding loans were VND241,155bil ($15,072mil) in VND, and $6,465mil in foreign currencies. Short-term loans were bigger than medium- and long-term loans, VND209,647bil vs VND135,353bil. As the VND/US$ exchange rate was stable and the interest rates on foreign currency loans were lower than VND loans (the former is just equal to 50-60% of the latter), enterprises preferred to borrow in foreign currencies. Meanwhile, depositors preferred making deposits in local currency to get higher interest rates.

In Hanoi, outstanding loans have also witnessed considerable growth. By the end of October 2007, total outstanding loans had reached VND163,838bil ($10,239mil), up by 37.44% over the end of 2006. It is expected that banks will disburse VND174,000bil ($10,87bil) by the end of this year, up by 45-48% over last year. Several joint stock banks expect to have outstanding loan growth rates of as high as 55-60%.

There is a noteworthy thing that the long-term outstanding loans grew more rapidly than short-term outstanding loans, which shows that the demand for long-term capital for expanding business scope and upgrading facilities is increasingly high. The short-term loans were VND100,089bil ($6,255mil) up by 33.5%, while the long-term loans were VND63,749bil ($3,984mil), up by 44.1%.

The record high mobilised capital and outstanding loans shows that more Vietnamese people can access banking services, and that opening bank deposits has become the choice of many more Vietnamese people.

In principle, the capital pumped by the banking system into the national economy will bring benefit in the next period. As such, the national economy is believed will maintain high growth rates in 2008 and the next years.

Source: TBKTVN.