Governor of the State Bank of Vietnam (SBV) Nguyen Thi Hong has submitted a report to National Assembly (NA) deputies on issues raised during the Question-and-Answer session, including credit management and control in potentially risky areas, especially securities lending, corporate bond issuance and real estate.

 

According to the report, by April 2022, credit for securities investment and trading accounted for about 0.5 percent of the total outstanding loans of the economy, mainly short-term loans (98 percent). By the end of April, the total outstanding debt of investment in corporate bonds of credit institutions was 320.4 trillion VND (13.8 billion USD), accounting for 2.86 percent of the total outstanding credit balance, which demonstrates that investment activities in corporate bonds of credit institutions are still under control.

 

In order to control risks related to securities and corporate bonds, Hong said the SBV has gradually improved the legal framework with stricter regulations, and strengthen inspections and supervision over the supply of credit in the fields of securities and corporate bond investment.

 

The central bank will continue to study and revise regulations on buying and selling corporate bonds of credit institutions, improving their governance requirements and standards when participating in the corporate bond market to contribute to ensuring the safety of banking activities, and sustainably develop the market.

 

It will also maintain close coordination with ministries and sectors to accelerate the implementation of solutions to restructure and sustainably develop financial market segments, including the corporate bond market, to make the market become a major medium- and long-term capital mobilisation channel of the economy.

 

Regarding loans for real estate investment and business, the central bank said that by the end of April, the total outstanding loans for the real estate sector of credit institutions reached nearly 2.29 quadrillion VND, a year-on-year increase of 10.19 percent, accounting for 20.44 percent of the total outstanding loans of the economy, and the bad debt rate was 1.62 percent.

 

It assessed that real estate investment and business is one of the risky areas for banking activities, requiring strict solutions to control.

 

At present, the credit growth and credit quality for the real estate sector are under close supervision of the State Bank, the SBV said, adding that it will coordinate with relevant ministries and agencies to fine tune legal regulations to support sustainable development of the real estate market and ensure safety of credit institutions./.

VNA