Bank loans to real estate business rise in H1 2023
Bank loans to real estate business rise in H1 2023
Data of 17 listed banks showed their total outstanding loans for the real estate sector in the first half of 2023 reached 426 trillion VND, up 36.2% compared to the end of last year. The proportion of the banks’ loans in this sector also increased from 8% at the end of 2022 to 10% at the end of the second quarter of 2023.

The rise showed banks were still continuing to inject capital into the real estate sector even though the real estate market had not improved much.

According to the data, 14 out of the 17 banks recorded an increase in outstanding loans for real estate compared to the beginning of the year.

The highest growth rate belonged to SHB with a rise from more than 31 trillion VND to 59 trillion VND, equivalent to an increase of 88.8%.

HDBank and Sacombank also recorded rapid growth of outstanding loans for real estate, reaching about 56% each.

Meanwhile, outstanding loans for real estate businesses at many banks, such as LPBank, PG Bank and VIB, recorded a sharp decrease of 49.1%, 34.5% and 14.8% compared to the beginning of the year, respectively.

At Techcombank, which was the leader in real estate lending, the proportion of loans to real estate sector accounted for about 33% of the bank's total loans to customers.

In meetings with firms, representatives of the State Bank of Vietnam (SBV) has repeatedly affirmed that the central bank would not tighten real estate lending. In the current context of slow credit growth, banks are increasingly focusing on easing access to capital for firms, including those in real estate.

Most recently, after recommendations from firms and the HCM City Real Estate Association, the SBV adjusted Circular 06, suspending the implementation of three provisions that have a significant impact on the real estate market.

According to the ACB Securities Company (ACBS), the suspension of the provisions will support real estate firms to restructure.

In addition, banks also have a legal corridor to be able to lend to real estate buyers who have not yet met the business conditions (sales licence), but have qualified for legal conditions.

The suspension will also assist real estate firms in borrowing for investment, an increase of land area or investment in a new project. Most real estate firms can benefit from this circular.

ACB’s analysts also believe that the suspension will contribute to supporting credit growth, which has been at a low level recently. The credit at the end of July increased by only 4.56% compared to the beginning of the year, and decreased by 0.17% compared to the end of June./.