SBV gives priority to loosen credit room for banks with good liquidity, which bank has the advantage?

The representative of the State Bank repeatedly emphasized that the principle of increasing credit targets is in the direction that credit institutions with better liquidity and lower interest rates will enjoy higher credit growth.

In the context that external influences have eased, the liquidity of the credit institution system has improved, the State Bank has decided to loosen the credit room from 1.5-2%, which means an extension of the credit limit. credit levels for credit institutions to have conditions to increase resources and expand credit for businesses, subjects and necessary fields in the economy.

An increase of 1.5-2% equivalent to VND 240,000 billion will be supplied to the economy.

Although the distribution ratio for each bank has not been announced, the representative of the State Bank has repeatedly emphasized that the principle of increasing credit targets is in the direction of credit institutions with better liquidity and low interest rates. will be higher credit growth.

According to Deputy Governor Dao Minh Tu, credit allocation has many desires and goals.First of all, how to create conditions for commercial banks to expand credit in necessary areas. But the credit allocation is also encouraged for commercial banks that have abundant liquidity and have implemented the current policy of reducing interest rates.

On the other hand, some banks still have credit room according to their all oration since the beginning of the year. For example, Agribank has ample credit space,so it is not necessary for those banks to expand the room further this time or a bank that is raising interest rates at a high level, the SBV finds that it is also necessary to limit credit growth. …

Therefore,this credit allocation can be considered as one of the policies to encourage commercial banks to focus on mobilizing capital and reduce interest rates,creating very favorable and positive conditions, even in terms of financial resources. capital, interest rates for businesses, for necessary projects and programs of the economy," said Mr. Tu.

Which bank is having the best liquidity?

Usually,the liquidity of banks is assessed through the ratio of outstanding loans to total deposits (LDR). The lower this ratio, the more solid the bank's liquidity is.

Circular22/2019/TT-NHNN of the State Bank of Vietnam requires banks and foreign bank branches to ensure that the LDR ratio does not exceed 85%. In which, total deposits include deposits on market 1 (transactions between financial institutions, businesses and residents) and a part on market 2 (inter bank, transactions between financial institutions). or between the State Bank and financial institutions).

According to calculations by MB Securities (MBS), at the end of September, TPBank had the lowest LDR ratio among 19 banks listed on the HSX and HNX, at 63.8%. Follow in gare MSB (70.8%), HDBank (71.9%), NCB (71.6%), OCB (72.7%), VIB (75.9%), SeABank(77. 7%),…

In the recently published strategy report, VN Direct has also made a comparison table to assess the liquidity risk response ability of listed banks based on a number of liquidity criteria "L - liquidity" in the model. CAMEL image. To reduce the influence of the time factor, the analysis team averaged the data on the financial statements of the banks at the end of 2021 and the end of the third quarter of 22.

VN Direct also notes that low ratings do not mean that the bank has liquidity risk. The higher the rating, the higher the short-term payment pressure increases, the liquidity risk will be minimized. Specifically:

Liquid asset/Customer deposits ratio: The higher a bank has this ratio means that the bank will be able to easily convert it to cash, enough to meet its obligations.short-term payments. According to calculations of VN Direct, TPBank, HDBank, MSBare leading banks in this criterion.

Customer Loan/Customer Deposit Ratio (Gross LDR): This is a ratio that measures the abundance of liquidity, the higher this ratio is, the more the bank has optimized its capital mobilization. So the lower the index, the better. TPBank, MSB, HDBank continue to be the banks with the best ratings in this criterion.

Liquid asset/Total asset ratio: Similar to criterion number 1, the higher this ratio allows the bank to quickly meet its short-term payment obligations. In which,TPBank, ABBank, Vietcombank are the banks with the best ratings.

Short-term loans/Net loans: BIDV, ACB, Eximbank are the banks with the highest ratio, also the best ranking.

Demand deposit/Customer deposits ratio (CASA - Demand deposit/Customer deposits): The higher this ratio, the less pressure a bank is under to raise long-term capital to meet lending needs. Currently, Techcombank is the highest ranked bank,followed by MB, Vietcombank, and MSB.

Ratio of deposits from organizations/Total customer deposits(Non-individuals/Customer deposits). From a market perspective, the higher the deposit ratio of institutional customers, the more stable the bank's mobilized capital. Therefore, the higher this ratio, the better the bank's ability to meet payments. TPBank is currently the highest ranked bank, followed by VPBank,MSB, and VietinBank.