Outstanding credit debt to increase by 4.4% in 1Q2024

System-wide capital mobilization to increase by an average of 2.6%

According to the results of a survey on business trends of credit institutions in the first quarter of 2024 announced by the Department of Statistical Forecasting (State Bank), credit institutions expect system-wide capital mobilization to increase by an average of 2.6% in the first quarter and by 12.1% in 2024, equivalent to expectations in the previous survey period.

In addition, the outstanding credit debt of the banking system is forecast to increase by 4.4% in the first quarter of 2024 and by 14.2% in 2024, adjusted to increase by 0.4 percentage points compared to the forecast of 13.8% in the previous survey period.

Contrary to expectations of a decrease, this period's survey results show that credit institutions believe that the bad debt/credit balance ratio in the fourth quarter of 2023 will continue the slight upward trend, but is expected to decrease slightly in the first quarter of 2024.

Overall, the proportion of credit institutions that perceive customers' demand for using banking services to improve is lower than in 2022; in which the demand for deposits is estimated to increase faster than the demand for payments and loans.

In the first quarter of 2024, the proportion of credit institutions forecasting an improvement in customer demand for banking services is lower than in the fourth quarter of 2023, but is forecast to improve even more strongly in 2024. Notably, loan demand is forecast to improve more than deposit and payment demand, different from the developments in 2023.

Credit institutions say that the liquidity of the banking system in the fourth quarter of 2023 continued to maintain a good state and improved more positively than expected. At the same time, the liquidity situation in 2023 was more abundant than in 2022 and is expected to continue to be abundant in the first quarter of 2024 and the whole year 2024.

Better business situation in 2024

Mobilization lending interest rates are forecast to continue to decrease slightly, by 0.3-0.4 percentage points on average in the first quarter of 2024 and by 0.2 percentage points in the whole year 2024.

In 2023, customer risk level was expected to increase significantly compared to 2022 and increase much stronger than the initial forecast, however expectations may decrease in 2024.

Also, according to the State Bank's investigation results, the business situation and pre-tax profit of the banking system in the fourth quarter of 2023 improved slightly compared to the previous quarter, but was much lower than recorded in the previous survey.

Along with that, credit institutions stated that the business situation in 2023 has not met expectations, and sharply reduced expectations for pre-tax profit growth compared to forecasts in the previous survey period.

Specifically, 78.6% of credit institutions estimated pre-tax profit in 2023 to grow positively compared to 2022; 17.9% of credit institutions estimated negative profit growth and 3.6% estimated no change.

With the business situation and pre-tax profit in 2023 growing at a low level and not reaching expectations, credit institutions expect the business situation to be better from the first quarter of 2024 and the whole year 2024. But pre-tax profits may recover more slowly than the business situation.

Source: vietnambiz

Compiled by VBI