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Banks still saying no to real estate credit   2010-01-22 - VietNamNet/DTCK

Though commercial banks still advertise real estate loans, real estate investors are finding it impossible to access them.


The reason? Banks simply cannot spare enough cash to lend.


General director of VietBank Nguyen Duy Hung said that VietBank is now only giving loans to fund individuals’ purchase of houses for accommodations. They must have a stable income to ensure their solvency. The bank is also lending to small and medium enterprises which need capital to set up workshops for their business plan.


However, banks are saying no to real estate speculators


Deputy general director of Western Bank Nguyen Quoc Sy said he keeps lending to fund client homes purchases, but he will not fund real estate speculation deals which he thinks are very risky.


Sy went on to add that the bank plans to focus on developing credit, but will prioritize to give loans to support production and business plans.


ABBank still considers funding house purchases as one of its strategic banking products which it expects to represent 50 percent of the bank’s total loans to customers in 2010. However, ABBank and other banks have shortened the lending time.


And loans now are valued at up to 70 percent of a mortgaged assets’ value instead of the 90 percent applied in the same period of the last year


Most commercial banks are now facing big difficulties in capital mobilization. That explains why they have become more careful in their lending. Meanwhile, banks now can use 30 percent of short term mobilized capital for medium and long term loans only instead of 40 percent as applied in the first two quarter of 2009.


Ly Xuan Hai, general director of ACB said that the bank does not plan to provide capital to real estate developers.  As with others it is only providing loans to help individual clients build new houses or upgrade existing homes. Borrowers now have to meet higher requirements set by the bank.


For example, borrowers must have stable income of five million dong a month at least instead of three million dong as previously applied. The value of the loans are no more than 70 percent of the mortgaged assets, while the maximum lending time has been narrowed to seven years. Bosses at ACB have raised the lending interest rate to 19 percent per annum.      


According to Le Xuan Nghia, deputy chairman of the National Finance Supervision Committee, real estate outstanding loans in 2009 were some 200 trillion dong, 51 percent of which were provided by commercial banks in HCM City.

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