HCMC sees plunge in first quarter's lending

Tuoi Tre
Updated : Tue, May 3, 2011,9:48 AM (GMT+0700)

Compared to the third quarter of 2010, total lending for non-production activities in the first quarter in Ho Chi Minh City dropped significantly.
A big chunk of the total VND138 trillion (US$6.7 billion) of non-production loans, VND97 trillion were lent for real estate activities, VND34 trillion for consumption and VND7 trillion for stocks.
Compared to the last quarter of last year, consumption lending saw the deepest drop, 7.4 percent. Stock loans decreased by 2.8 percent, and real estate lending, by 1.3 percent.
Meanwhile, credit lending citywide saw an modest increase of  VND2.2 trillion, which was due to high interest rates (some are as high as 26 percent per year), as well as banks’ race to call in non-production loans in order to meet the State Bank of Vietnam deadlines.
VND deposits at banks in the first quarter continued to drop though these interest rates have actually exceeded the ceiling imposed by the state bank.
Compared the last quarter of 2010, dong deposits in HCMC went down by 7 percent, reaching about  VND572 trillion.
After the state bank set the interest rate ceiling for foreign currency deposits at 3 percent per year, deposits in foreign currencies only increased by 0.06 percent, reaching only VND100 billion in the first quarter of this year.