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Posts Tagged ‘credit’

Euro falls as Irish credit rating cut

In Uncategorized on December 20, 2010 at 6:27 am

TOKYO, Dec 20, 2010 (AFP) – The euro fell against other currencies in Asia on Monday on worries over the eurozone’s public finances after Moody’s slashed debt-stricken Ireland’s credit rating, analysts said.

The euro fell to 1.3154 from 1.3185 dollars in New York late Friday and to 110.35 yen from 110.78 yen. The dollar firmed to 84.00 yen from 83.94 yen.

Moody’s Investors Service on Friday cut its credit rating on Ireland by five notches, citing uncertainties over the country’s economy and public finances.

It came a day after European leaders agreed at a Brussels summit to set up a permanent financial stability mechanism from 2013 to shore up the euro amid fears Portugal and Spain may need bailouts after Irish and Greek rescues.

But there was no decision to increase its size beyond the bloc’s temporary 750 billion euro fund or allow it to purchase government bonds, or introduce a common European bond, John Kyriakopoulos of National Australian Bank noted.

“As such, European sovereign debt concerns are likely to linger into the New Year,” he wrote in a note, adding investors needed to watch European bank funding costs.

The failure to enlarge the size of the bailout fund was disappointing “given worries that it is insufficient to cope with the bailout of larger eurozone countries if needed,” said Frances Cheung at Credit Agricole CIB.

The South Korean won fell after South Korea ordered civilians on five border islands to take shelter ahead of a live-fire exercise Monday despite North Korean threats of deadly retaliation.

The unit extended its early losses against the safe-haven US dollar, which in morning trade fetched 1,167.40 won from 1,163.40 earlier.

But the news hardly moved dollar-yen rates with the yen also drawing buying as a safe currency, analysts said.

Source: SGGP

Citibank Vietnam launches travel credit card

In Uncategorized on December 16, 2010 at 10:03 am

Citibank N.A. Vietnam Friday announced the launch of the Citibank PremierMiles Credit Card targeted at elite and affluent consumers in the country, where the American bank has been present since 1993.

“We think the card market here is just beginning. We see real opportunities to come in,” Brett Krause, managing director, Citi country officer for Vietnam, said at a press conference in Ho Chi Minh City on Friday.

(L-R) Hoang Thanh Ha, public affairs officer, Citibank Vietnam, Brett Krause, Citi country officer, and Surath Chatterjee, regional head for credit cards and personal loans, Citibank Asia Pacific, introduce the Citibank PremierMiles Credit Card in Ho Chi Minh City Dec 10, 2010 (Photo: Tuong Thuy)

The Citibank PremierMiles Credit Card leverages Citibank’s partnerships with major airlines in the region to offer best in class features and benefits to customers in Vietnam, he added.

Customers earn 1 Premier Mile for every VND20,000 (US$1) of spend and cash advances on the card, 1000 Bonus PremierMiles upon renewal and 5000 Bonus PremierMiles for spend over VND500 million (US$25,000) in one year.

Premier Miles can be redeemed for free flight awards on most airlines flying out of Vietnam, including Vietnam Airlines, Singapore Airlines, Cathay Pacific Airways (and Asia Miles partner airlines), Thai Airways and Delta Airlines to destinations around the world.

The Premier Miles that customers earn never expire, said Mr. Krause.

“The Citibank PremierMiles Card introduces a new and unique concept in credit cards to the Vietnamese market.

“It is the most prestigious and rewarding card ever introduced to
Vietnam, and at the same time it offers comprehensive protection backed by best-in-class technology and service.

“The Citibank PremierMiles Card is a reiteration of our commitment to bring world-class products and services to Vietnam.”

Citibank and MasterCard have collaborated to launch the card, Mr. Antonio Corró, country head and chief representative for Indochina, MasterCard, told the press meeting.

“MasterCard’s latest travel survey revealed that one in four consumers across Asia/Pacific is looking to travel. Catering to the needs of avid Vietnamese travelers, MasterCard is pleased to work with Citibank to launch the card.”

Vietnam is the 8th market in Asia where Citibank has launched the card, said Mr. Surath Chatterjee, regional head – credit cards and personal loans, Citibank Asia Pacific.

“We are very confident of good results here,” he said.

“We will continue to leverage our global and regional resources to bring class-leading products and services to our local customers in Vietnam.

“Vietnam is a priority market for us and we will invest in products and strive to pioneer many such innovations in Vietnam in the future.”

He added that no cash collateral was required to apply for this card. Further, while a bank account with Citibank is recommended, it is not required, giving the customers the ability to choose to pay for the card from their existing bank account.

Citibank says the card includes such benefits as an EMV chip for additional security for your transactions, complimentary membership to Priority Pass (worth US$99) which gives customers access to 600 VIP airport lounges around the world, travel insurance benefits, discounts and privileges at over 6,000 merchants across Asia with Citibank World Privileges.

The travel insurance benefits including personal air travel accident insurance coverage of VND20 billion, luggage loss cover of up to VND20 million, delayed luggage cover of up to VND10 Million and flight delayed cover of up to VND10 million.

Source: SGGP

Farmers get more credit

In Uncategorized on July 1, 2010 at 6:18 pm

Farmers get more credit

QĐND – Thursday, July 01, 2010, 21:23 (GMT+7)

A decree intended to improve the flow of credit to farmers became effective yesterday, June 30.

Decree 41/2010/ND-CP issued in April makes money more widely available and allows more loans without collateral.

Its introduction coincides with a meeting in Ha Noi yesterday to review Decision 67/1999/QT-TTg of March 1999 that increased credit for agriculture from VND34 trillion (US$1.79 billion) in 1998 to VND293 trillion ($15.42 billion) in 2009.

The decision also stipulated that credit growth was to remain at a yearly 21.78 per cent so as to maintain average yearly agro-fisheries and forestry growth at 3.7 per cent, in accordance with a State Bank of Viet Nam’s suggestion.

The purpose of the decision was to make it easier for farmers to access credit; build a competitive agricultural industry and improve rural life.

“Decision 67 allowed farmers and enterprises to borrow VND10-15 million ($526-790) but they were often told that banks did not mobilise enough capital,” northern Thai Nguyen Province’s People’s Committee deputy chairman Dang Viet Thuan told the meeting.

“Will the new decision allow borrowers to raise VND50-500 million ($2,630-26,315) loans?” he asked.

Viet Nam Farmers’ Association chairman Nguyen Quoc Cuong suggested that co-operative regulations and administrative procedures should be more thoroughly followed.

Terms of borrowing should not be universal because farming conditions differed, he said.

The chairman told the meeting that the credit programme had helped millions of farmers apply for loans and his association had more than 230 credit teams.

The programme had also ensured food security and helped eliminate hunger and reduce poverty.


But many delegates, who included representatives of the Agriculture and Rural Development Ministry; central and State-owned commercial banks and provincial people’s committees, agreed that the programme had struck numerous problems.

The application procedures were too complex; the terms for borrowing were inappropriate and co-operation between those responsible for lending the money lacked cohesion.

The short comings had limited the effectiveness of agricultural credit policy.

They also suggested that a development plan should be made for each farming area before any credit was granted so as to ensure the capital would be used effectively.

Agriculture and Rural Development Minister Cao Duc Phat suggested the banks should allow credit for agriculture to grow at a yearly 24 per cent so that the sector could develop by 4 per cent a year, in accordance with Viet Nam Communist Party Central Committee’s Resolution 7.

State Bank of Viet Nam Governor Nguyen Van Giau said the central bank was working with Agribank to draft proposals for better agricultural credit programmes.

Source: VietNamNet/Viet Nam News

Source: QDND

Moody’s says downgrades BP’s credit rating three notches

In Uncategorized on June 18, 2010 at 12:22 pm

International ratings agency Moody’s downgraded the creditworthiness of BP by three notches on Friday, reflecting “the worsening impact” of the Gulf of Mexico oil spill on the group’s finances.

An oil-soaked bird struggles against the side of an Iron Horse supply vessel at the site of the oil spill off Louisiana on May 9.

“Moody’s Investors Service has today downgraded the senior unsecured ratings of BP and of all long-term debt securities issued by its subsidiaries and guaranteed by BP by three notches to A2 from Aa2,” said a statement.

The downgrades, which follow similar moves this week by Fitch and Standard & Poor’s, will increase the cost of BP’s borrowing as investors demand higher returns for taking greater risk.

Moody’s said that its downgrade “reflects the worsening impact expected from the oil pouring into the Gulf of Mexico from BP’s subsea Macondo well”.

It added: “Moody’s updated assessment is that the spill will have a sustained negative impact on the group’s free cash flow generation and overall financial profile for a number of years.

“This assessment reflects a substantial upward revision of the estimated size of the leak, the continued failure to bring the leaking Macondo well under control, and the mounting costs and claims for damages.

“Moody’s believes that costs for containment, clean-up, litigation and fines are likely to be higher than the rating agency had previously expected in view of the widespread and continuing physical and economic damage.”


Source: SGGP

Rate cuts, credit growth make for a healthy financial market

In Uncategorized on May 12, 2010 at 8:51 am

Interest rate cuts and credit growth have injected vigor and strength into Vietnam’s financial market recently.

All state-owned commercial banks cut lending interest rates by 1 percent to 13 percent per year May 1, and many other commercial banks quickly followed suit.

LienVietBank said it has cut negotiable lending interest rate on short-term loans in VND by 0.5 percent per year while providing customers with good credit an additional 0.5-percent cut.

Dr. Nguyen Duc Huong, LienVietBank’s standing vice chairman, said the current trend monetary market watchers were seeing was commercial banks reducing lending rates to attract customers with good credit and efficient business operations.

Customers and agents process transactions at an Eximbank branch in Ho Chi Minh City (Photo: SGGP)
Military Commercial Joint Stock Bank has not yet officially announced its new interest rates, but has said that the new rates would “benefit borrowers.”

Many other commercial banks told SGGP that they were considering cutting operating expenses to lower lending interest rates, especially for short-term loans.

Banking experts said that the trend could send most lending interest rates 0.5-1 percent lower this month than those in late April.  

More cuts expected

Dr Cao Sy Kiem, chairman of the Vietnam Association of Small and Medium Enterprises, told SGGP the drop in interest rates had not yet bottomed out.

“Compared to a few months ago, when the lending rate soared to 17-18 percent, current rates are affordable to most businesses. However, they should be lowered even further to boost the profitability of loans.”

Currently, lending rates on medium and long term loans remain high, at 14-14.5 percent per year, even 16 percent at some banks.

At a recent monthly Government meeting in April, Prime Minister Nguyen Tan Dung instructed banks to lower lending and deposit interest rates to 12 and 10 percent respectively this year.

Dr. Nguyen Ngoc Bao, head of the Monetary Policy Department at the State Bank of Vietnam (SBV), said the central lender was planning to adjust interest rates in line with the Prime Minister’s instructions. 

Duong Thu Huong, general secretary of the Vietnam Bankers Association, said the lending interest reduction should be carried out gradually, since many banks had previously received deposits at higher rates than current ones.

Deposit rates at commercial banks are now 11-11.5 percent, down 0.5-1 percent from late April, according to the SBV.

Ms. Huong pointed out that deposits would increase only once deposit interest rates are higher than the inflation rate. “Whether commercial banks can further lower deposit rates in the future depends a lot on the inflation situation,” she said.

Credit growth recovery

After a slowdown in the first quarter of the year, overall credit growth has recovered, the central bank said.  In April, credit expanded by 1.73 percent from March, with credit in VND expanding by 1.41 percent.

Compared to late last year, credit has now grown by 5.58 percent, meaning commercial banks can boost lending in the months to come, the state lender said.

After nearly a month-long slump, the selling price of US dollars at commercial banks has recovered. Over the past two days, a dollar has sold for VND19,060 at Vietcombank. However, on the open market, the rate was lower, at VND19,010. 

Along with the recovery of USD price, it has been rumored that the central bank will soon adjust the forex trading band.

Talking with SGGP yesterday, central bank governor Nguyen Van Giau said the rumor was groundless. “The foreign exchange market is now stable and we have no plan to adjust exchange rates,” he confirmed.

Source: SGGP

Spain successfully sells debt despite credit downgrade

In Uncategorized on May 6, 2010 at 4:37 pm

Spain successfully raised 2.345 billion euros on Thursday in the country’s first debt sale since its credit rating was cut last week, easing investors’ immediate fears of contagion from Greece’s fiscal woes.

People hold flags and banners during a demonstration called by trade unions against austerity plans announced last month by the government of Prime Minister Jose Luis Rodriguez Zapatero.

But the yield on the notes due April 2015 rose to an average of 3.532 percent compared to 2.81 percent the last time such bonds were issued in March, a spokesman for Spain’s secretary of state for the economy told AFP.

The five-year bond was 2.3 times oversubscribed, the highest ratio so far this year for a government debt sale, with demand coming from both foreign and domestic investors, he said.

“It is a sign that while we have to pay higher interest rates, interest in Spanish debt has not diminished,” the spokesman said.

Spain had said it expected to raise between two and three billion euros.

“We did not expect that it would go this well,” a market source told AFP.

It was the first time that Spain returned to the bond market since ratings agency Standard & Poor’s cut the country’s long-term credit rating to “AA” from “AA+” on April 28 on fears the country’s poor growth prospects could further weaken its public finances.

Spain’s economy, which is more than four times the size of Greece, has been contracting since the second quarter of 2008 following the collapse of a property bubble.

The public deficit reached 11.2 percent of gross domestic product last year, almost four times the limit of 3.0 percent imposed on the 16 nations that use the euro single currency, compared with 13.6 percent for Greece.

The government announced a 50 billion euro (66.5 billion dollar) austerity package earlier this year as part of its drive to cut its deficit to within the 3.0 percent eurozone limit by 2013.

The plan includes cuts in government spending, a virtual freeze in the hiring of civil servants and some tax rises.

It has also proposed raising the legal retirement age from 65 to 67 and wants to cut the cost of firing workers as part of efforts to revive the economy and slash the unemployment rate, which is just over 20 percent.

Economy Minister Elena Salgado said Wednesday that Spain would not be announcing extra austerity measures in response to the loss of confidence among investors but would instead concentrate on implementing the programme it has already approved.

“Rather than announcing new measures, what we have to do is enact what we have already announced,” she told news radio Cadena Ser, adding the most recent economic indicators show Spain was starting to emerge from recession.

“We are having a complicated time on financial markets but, in terms of the economic data, we are recovering, we have positive data and we are far better off than a year ago,” she said.

Spanish industrial production rose in March on a 12-month basis for the first time since April 2008, the national statistics institute said Wednesday.

Spain, which has the eurozone’s third-largest deficit after Ireland and Greece, was last cut by S&P in January 2009 when its credit rating was lowered one notch from AAA, the highest possible rating.

S&P’s move on Spain came one day after it cut Portugal’s long-term credit rating by two notches and reduced Greece’s rating the junk status, the first eurozone country rated less than investment grade since the launch of the euro.


Source: SGGP

Moody’s gives Vietnam Ba3 credit rating

In Vietnam Economy on January 18, 2010 at 2:55 pm

Credit rating agency Moody’s maintains a positive outlook for Vietnam and forecasts stable prospects, giving it a Ba3 rating, the Ministry of Finance said.

Rating symbols and definition

It is based on the country’s GDP growth rate of 5.32 percent last year and inflation rate of 6.5 percent, the ministry said.
Vietnam’s rating is one grade higher than other countries in the region, with the Philippines getting Ba3/BB and Indonesia Ba2/BB.
The ministry has cooperated with ratings organizations like Moody’s, Standard & Poor’s, and Fitch Ratings for many years now. 

Source: SGGP Bookmark & Share

Credit crunch clouds uneven European rebound

In World on October 4, 2009 at 12:51 pm

PARIS (AFP) – European economies are shaking off recession but analysts warn the pace of recovery could vary greatly from country to country, revealing a North-South divide, and could be undone by a squeeze on credit.

Shoppers crowd a store in Paris. European economies are shaking off recession but analysts warn the pace of recovery could vary greatly from country to country, revealing a North-South divide, and could be undone by a squeeze on credit. (AFP file)

Economists show near unanimity that official stimulus measures, renewed consumer and business confidence and beefed up production have combined to halt the worst downturn since the 1930s.

The eurozone’s two leading economies, Germany and France, have already put recession behind them and, according to analysts at ING Bank “the coming months are likely to bring more good news” for the bloc as a whole.

ING says a return to growth of 0.5 percent in the 16-nation eurozone is possible in the third quarter compared with the second.

While gross domestic product is projected decline 3.8 percent in 2009, it should show an expansion of 1.2 percent in 2010 and 2.1 percent in 2011.

The rebound in the eurozone is also likely to have a salutary impact on Russia and central and eastern Europe, where analysts at Capital Economics see negative growth of 8.0 percent this year transformed into a 1.0 percent momentum gain in 2010 and 2.0 percent in 2011.Related article: Eurozone interest rate

But economists are voicing concern that recovery in Europe will be far from uniform.

“The fast growing economies of the past are likely to be the laggards of the future, while past laggards need to fully tap their growth potential,” ING analysts said.

Gilles Moec at Deutsche Bank in a recent note cited a potential North-South split, pointing to “striking divergences” within the eurozone.

Whereas France and Germany encountered the downturn from positions of relative economic health, “the dire state of public finances in Italy prevented any fiscal support from mitigating the recession there while Spain has to cope with overindebtedness in both the household and corporate sectors.”

Industrial output, a key component of economic well-being, improved in both France and Germany in July while declining in Spain and Italy, he said.

ING economists say the real test for eurozone will come next year, when government support measures are withdrawn.

“The economy still needs to prove that it can swim without armbands,” they wrote recently.

Among their principal worries is the availability of credit — critical to sustaining momentum — in Germany and France.

Loans to the German corporate sector have been on the decline since the start of the year at a time when demand for such credit has been rising, according to ING.

“This makes a real text book credit crunch a realistic threat for the German economy,” ING analysts said.

Credit conditions are also tightening in France, where new loans from the banking system to the private sector fell by 20 percent in July compared with the same month last year and where managers are reporting difficulties in meeting the financing needs of their companies, ING analysts found.

A credit crunch looms over the emerging market economies of eastern Europe as well.

“Aggressive cuts in official interest rates over the past year have yet to have much impact on borrowing costs in the real economy,” according to analysts at Capital Economics.

They said that interest rates on consumer loans in every country of eastern Europe are higher than they were a year ago.

The problem, they added, is that emerging market lenders — still saddled with risky, “non-performing” loans — are generally hesitant to approve fresh credit.

For Russia, another potential constraint to recovery is the prospect of falling oil prices next year when a recent surge in stock-building comes to an end, Capital Economics analysts said.

“Any shock to oil prices is likely to lead to a sharp sell-off in the ruble.

“This in turn would force the central bank to hike interest rates and tighten liquidity conditions, thus adding to the already enormous pressure on Russia’s fragile banking sector.”

Source: SGGP

Banks hike deposit interest on high credit demand

In Vietnam Banking Finance on September 9, 2009 at 2:51 am

With demand for credit remaining high, banks have scrambled to raise deposit interest rates to mobilize funds.

Transaction conducted at a Sacombank branch in Ho Chi Minh City

The highest rate offered now is 10.3 percent, close to the ceiling lending rate of 10.5 percent, which is 150 percent of the central bank’s interest rate.
Ho Chi Minh City Housing Development Joint-stock Bank offers 10.3 percent for a 36-month term.
Saigon Commercial Bank offers 10 percent for 13- to 24-month terms and Saigon-Hanoi Bank has raised its rate to a maximum of 9.65 percent.
Besides hiking interest rates, banks are also offering a slew of promotions.
Techcombank presents gifts to clients who deposit over VND20 million.
Sacombank has announced a lottery for depositors with a special prize of a BMW car worth VND1.4-billion besides many other prizes.

Source: SGGP

Easier credit fans inflation fears

In Uncategorized on December 4, 2008 at 1:37 pm

HCM CITY — Commercial banks are offering personal loans to increase credit growth and stimulate consumption but a finance ministry official has queried the wisdom of this move, warning it could bring back inflation.

Pham Quoc Thanh, deputy general director of An Binh Commercial Joint Stock Bank (ABBank), said his bank is offering incentives to borrowers.

It is offering a 10th of a tael of gold, or 3.75 grammes, for every VND100 million (US$6,000) to customers borrowing at least VND500 million for buying a house or vehicle, he said.

Thanh said boosting personal loans would stimulate consumption.

The Bank for Technology and Commerce of Viet Nam (Techcombank) is also offering a promotional programme for a loan package worth VND1.5 billion ($90,000) for buying a house and vehicle and household articles.

Personal loans account for 35 per cent of Techcombank’s total outstanding loans.

In the last few months commercial banks limited personal loans as the Government tightened monetary policy in the face of soaring inflation.

Liquidity boost not good: expert

The commercial banks’ plans to provide loans to boost consumption again raises inflation concerns, Vu Dinh Anh, deputy head of the Ministry of Finance’s Price and Market Research Institute, said.

He warned against increasing liquidity in the economy.

If the personal loans are not closely monitored, individuals could use them to invest in stocks and property, causing serious consequences, he said.

To stimulate consumption, analysts said, it is better to reduce prices of goods and services rather than increase credit. —