Affirming the position of financial center of the North Central region

(Baonghean) - One of the outstanding "marks" of the 2010-2015 term is the strong development of the banking system and credit institutions. This rapid and strong development has created a large source of mobilized capital to meet the investment and development needs in the area, reaching the level of a financial and banking center in the North Central region.

It can be said that one of the most noticeable "marks of the term" is the strong development of the banking system and credit institutions in the area, increasing both quantity and quality.

Rapidly increase the scale and quality of services

This has created favorable conditions for credit flows to better serve the growing demand for the economy. The report of the State Bank of Vietnam, Nghe An Branch shows that, up to now, in the area there are: 94 credit institutions (CIs), level 1 CI branches; 248 transaction offices, savings funds; 483 transaction points; 240 ATMs and 760 POS; 1 deposit insurance branch in the North Central region. Compared to the beginning of the term, in terms of quantity, there have been 4 more branches of commercial banks, 11 grassroots People's Credit Funds, 119 transaction offices, 105 ATMs and 520 POS.

Transaction at HD Bank Vinh branch. Photo: HS

A look at some banks in the area shows very rapid development, increasing in scale, using modern payment technology to meet the capital needs of the economy. After 20 years of operation in the field of banking credit, Ben Thuy Industrial and Commercial Bank has been renamed Vinh City Branch of Industrial and Commercial Bank (VietinBank), serving well the capital needs for development investment in the area. The total capital mobilized locally by the branch in 2014 was more than 2,500 billion VND, reaching 310% compared to 2010, capital growth averaged 32.5%/year, total outstanding debt reached nearly 2,000 billion VND, equal to 200% compared to the beginning of the term; average annual outstanding debt growth was more than 18%. Comrade Vo Huy Ha, Party Secretary, Director of VietinBank, Vinh City Branch said: “The branch will always closely follow the province's socio-economic development investment policy, VietinBank's orientation, promote the Party's leadership role, exploit all potentials and advantages of the branch to effectively carry out capital mobilization, increase credit investment growth to ensure safety and efficiency, contributing to affirming the position of VietinBank brand...”. As for Ho Chi Minh City Development Bank Vinh branch (HD Bank Vinh), newly established, operating for more than 5 years, but with a flexible style, "committing to the highest benefits" has developed with a network of 5 transaction offices, focusing on retail lending, small and medium business sector, import and export lending... taking advantage of preferential capital from JIBIC/JICA source of the Japanese Government, capital and outstanding debt have continuously increased, reaching 1,200 billion VND in 2014 with more than 20 thousand customers transacting.

With the rapid growth in quantity, credit institutions and banks have played a good role as intermediaries between depositors and borrowers, directing cash flow into priority areas, meeting capital needs for production, business and consumption. At the same time, it helps attract idle capital from the people, repels the problem of black credit, contributes to hunger eradication, poverty reduction, and new rural construction in Nghe An province.

During the past term, bank credit has grown continuously in line with the development of the provincial economy. Outstanding loans to date are estimated at VND118,245 billion, 2.55 times higher than in 2010, with an average annual increase of 20.9%; mobilized capital is estimated at VND73,319 billion, 2.6 times higher than in 2010, with an average annual increase of 21.4%. Bad debt accounts for 1.6% of total outstanding loans, lower than the national average. The capital of credit institutions and credit institution branches in the area has created conditions for industries, production sectors, and projects following the direction of the Government and the province to develop, helping businesses have resources to invest in technological innovation, increase labor productivity and reduce product costs... In the outstanding loans of credit institutions, the capital source for agricultural, forestry and fishery production is estimated at 26,305 billion VND, the outstanding loans for processing and consumption of agricultural, forestry, fishery and salt products is estimated at 6,523 billion VND, the outstanding loans for industrial production, trade, and non-agricultural services in rural areas is estimated at 3,401 billion VND, the outstanding loans for consumption in rural areas is estimated at 3,811 billion VND; loans for State development investment capital are estimated at 21,431 billion VND; credit programs for policy subjects are estimated at 6,292 billion VND; Loans for aquaculture development under Decree 67/2014/ND-CP reached 29 billion VND; loans under support policies to reduce losses in agriculture under Decision 68/2013/QD-TTg reached 83.5 billion VND; loans to support housing reached 130 billion VND.

The MDF wood processing line is being installed at the Nghe An MDF Wood Factory from a loan from a local commercial bank. Photo: Hs

Some projects funded by local banks have contributed to changing the economic structure of the province such as: Large-scale high-tech dairy farming project in Nghia Dan, Ban Ve Hydropower Project, Hua Na Hydropower Project, Tate & Lyle Sugarcane Joint Venture Project, MDF Wood Processing Factory Project in Nghia Dan... Banks and credit institutions have continuously provided convenient services, meeting the needs of people and businesses, in which payment services and services related to foreign exchange activities stand out. With non-cash payment methods, ensuring speed - accuracy - safety thanks to the application of modern technology, it has created conditions for capital sources of enterprises to circulate smoothly and quickly, which is the basis for accelerating the speed of capital circulation of enterprises - creating conditions to improve the efficiency of capital use; serving well the process of exchange and circulation of goods in the economy, promoting production development. Card payment activities, including the convenience of payment cards, are also of interest to banks and are increasingly improving in quality. In addition, electronic payment transactions such as online payment, Internet banking services, and mobile banking tend to grow strongly. Up to now, the total number of cards operating in the area has reached 883 thousand cards. Of which, domestic cards account for 97.6%, international cards account for 2.4%, with a network of 240 ATMs and 760 POS machines.

Worthy of being the financial center of the North Central region

Resolution No. 26-NQ/TW of the Politburo sets the goal of striving to build Nghe An into a fairly developed province in the Northern region by 2015, creating the foundation to basically become an industrial province by 2020; a center of finance, trade, tourism, education - training, science - technology, health, culture, sports, high-tech industry of the North Central region. Implementing the Action Program and the Plan to implement the Resolution of the Provincial Party Committee and the Provincial People's Committee, the banking system in the area has seriously improved the quality of services, increased support for people and businesses in accessing banking services, and accompanied businesses inside and outside the province to invest in effective projects in the province as well as in the region.

The State Bank's assessment report shows that Nghe An is gradually becoming a financial and banking center of the region, specifically: With current outstanding debt and mobilized capital, Nghe An is the province with the 3rd largest outstanding debt in the country (after Ho Chi Minh City and Hanoi) and the 8th largest capital mobilization in the country; leading the North Central region in terms of outstanding debt and capital mobilization, well meeting the demand for banking services for businesses and people in the province and in the region; Total investment capital outside the area accounts for about 27% of total lending capital of banks in the area, showing that banks in the area have increased the provision of services to projects and enterprises in the North Central region, including many large and key projects such as Nghi Son Oil Refinery Project in Thanh Hoa, BOT Project of National Highway 1A, Dong Ha - Quang Tri section, Quang Tri Hydropower Project, Song Gianh Cement Factory Project in Quang Binh, Ke Go Hydropower Project in Ha Tinh... Some projects have now come into operation and brought socio-economic efficiency to the region in general and neighboring provinces in particular.

In order for the banking system in the area to continue to develop stably and sustainably to better serve the economy of the province and the region, in addition to solutions to increase capital mobilization and expand credit investment safely and effectively, continue to handle and recover bad debts, improve credit quality, minimize the increase of bad debts; seriously implement credit policy programs in the area... Comrade Nguyen Thi Thu Thu, Director of the State Bank, Nghe An branch said: The branch continues to effectively implement key tasks and solutions under the direction of the Government and the Governor of the State Bank; implement tight, cautious and flexible monetary policies to ensure safe and effective banking operations; at the same time, link with the goals and tasks of socio-economic development of Nghe An province to invest in exploiting economic potentials and strengths, effectively supporting economic growth in the province.

Another very necessary thing is that banks need to be proactive in expanding their network systems, upgrading service provision infrastructure, in order to better meet the needs of people and businesses, especially in the three key economic regions of the province that have been identified, including Vinh City, Cua Lo Town, the Southeast districts of the province associated with the Southern Nghe An and Northern Ha Tinh regions; Hoang Mai - Quynh Luu region associated with the Southern Thanh Hoa and Northern Nghe An regions; the Western Nghe An region with the focus on Nghia Dan, Thai Hoa Town, Quy Hop, Tan Ky, Do Luong. Only then will the banking system and credit institutions in the area increasingly better serve the needs of investment capital and economic development, raising the level of the financial center of the North Central region.

Hong Son