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August 7, 2008

Vietnam’s Agribank year-to-date loans up 9%
State-run Agribank, Vietnam’s largest lender by assets, said on Wednesday its outstanding loans have so far increased 9.2 percent this year to around 252 trillion dong ($15.3 billion) and it would lend more to rice businesses, reported Reuters.

According to Agribank’s statement, the Hanoi-based unlisted bank has extended 70 percent of its loans to agricultural production, rural development, and farmers, said Reuters.

The bank, with total assets of nearly $21 billion at the end of May, has said loans last year rose 24 percent from 2006 to 230.8 trillion dong.

Agribank’s lending so far this year has stayed tuned with a policy by the State Bank of Vietnam, or the central bank, which aims to curb the country’s credit growth this year at 30 percent to help subdue inflation, after a surge of 54 percent last year.

On Tuesday the central bank said Vietnam’s loans in July edged up 0.7 percent from June, slowing from monthly growth of 1.22 percent in June, while outstanding loans in the first seven months of this year rose 18.36 percent from the end of 2007.

Agribank statement said it has added 10 trillion dong to its lending portfolio for the agricultural sector, aimed mainly funding companies to buy rice, aquatic products from farmers and sell them fertiliser.

It did not say how much of the extra funds would go to rice buying, a measure to help stop Mekong Delta paddy prices from falling as the summer-autumn crop harvesting there has peaked but export firms slowed their purchase partly due to fund shortages.

Paddy prices in the Delta have fallen by more than 9 percent from early July to 4,600-4,700 dong ($0.279-0.285) per kilogramme this week as farmers have harvested more than 60 percent of the crop.

Agribank said it could further cut lending rates to better serve the agricultural sector. It did not elaborate.

Since July 17 Agribank has reduced interest rates twice for both dong and dollar loans. It now charges dong loans at 19.8 percent per annum, from 21 percent previously, while rates on dollar loans have been cut to 7.2 percent from 10 percent.

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