Credit support for businesses on offer after Typhoon Yagi

According to assessment at a meeting held by the State Bank of Vietnam (SBV) on September 11, Typhoon Yagi affected nearly 900 customers in the northeastern province of Quang Ninh and the nearby city of Haiphong, the most affected localities, with total outstanding loans of $654 million.

The impacted sectors include livestock farming, aquaculture, production, commerce, and maritime ports, including fishing vessels.

The SBV leadership and local branch representatives agreed that the central bank and credit institutions should serve as a support system for businesses by flexibility in debt collection and creating favourable credit conditions for businesses to restore production after the natural disaster.

“Credit institutions must promptly review each customer case, clarify the extent of damages, and understand customer needs and proposals. Based on their authority, branches should consider offering interest rate reductions and be bold in providing loans to enable businesses to resume production and operations,” said SBV Deputy Governor Dao Minh Tu at the meeting.

“Head offices of banks should immediately allocate sufficient funds for branches to address the incurred losses and issue specific directives across the entire system in accordance with the guidance of the government. Additionally, the head offices should consider adjusting mechanisms, policies, reallocating capital between branches, and revising business targets for struggling branches,” Tu added.

However, the deputy governor emphasised that banks must ensure the principle of supporting businesses without allowing exploitation of policies.

“They must continue to direct the assessment of the storm’s impact on the banking sector in the affected areas and conduct thorough inspections and supervision of credit institutions to ensure that SBV’s policies supporting citizens and businesses are swiftly implemented. Local SBV branches may also research and propose policies suited to their respective regions,” said Tu.

To stabilise banking operations and support customers in restoring production and business, the SBV’s branch in Quang Ninh has directed local credit institutions to implement support measures to help businesses recover from the typhoon.

“Credit institutions and their branches in the region must restructure loan terms and maintain debt classifications for borrowers affected by the typhoon. It is necessary to consider waiving or reducing interest rates for businesses who suffered losses and provide new loans to customers for business recovery, in accordance with current regulations, while handling bad debts and risks for severely impacted customers who are unable to repay,” said Nguyen Duc Hien, director of the SBV branch in Quang Ninh.

From the perspective of commercial banks, Le Duy Hai, deputy general director of VietinBank, said that according to preliminary statistics, nearly 200 corporate customers have been affected by Typhoon Yagi, with outstanding loans of nearly $750 million.

“The bank will quickly assess the overall damage to its customers across the system to provide appropriate support measures. For businesses with bank insurance, VietinBank will expedite compensation processes to help citizens stabilise their lives as soon as possible,” Hai said.

Le Trung Thanh, senior executive vice president of BIDV, stated that they have continuously updated information from branches in Haiphong, Quang Ninh, and other localities to assess customer damages.

“BIDV considers this an urgent priority, evaluating each customer case to devise solutions for debt restructuring, debt deferral, interest reductions, and issuing credit packages with reasonable interest rates and scales to accompany citizens and businesses in their recovery after the storm,” said Thanh.

Beer giant SABECO is working with the Ho Chi Minh Communist Youth Union (HCYU), local authorities, and partners to support the rebuild of northern provinces following the destruction brought by Typhoon Yagi.

Typhoon Yagi, which made landfall in Hanoi on September 7, has caused major disruptions to infrastructure in the capital and surrounding areas.

The northern port city of Haiphong has faced severe flooding following Typhoon Yagi, greatly affecting locals and businesses.