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Vietnam Empty Office Towers Show Dreams Turned to Rubble


What went wrong in Vietnam’s property market

From afar, the gleaming metal and glass edifices of Hanoi’s EVN Tower illustrate Vietnam’s rapid economic development. Up close, the rubble-strewn entrance and missing windows tell another story: one of loose lending and property speculation that now hangs over the country’s banks.

State-run monopoly Vietnam Electricity began construction of the 33- and 29- story dual-tower development in 2007, a year when 54 percent credit growth helped fuel the fastest economic expansion since 1996. Now, the economy has slowed, banks are struggling with an increase in bad debts, and unfinished property projects, empty offices and lower rents risk adding to the pile of non-performing loans.

“Banks were far too eager to lend and a lot of the projects that have been built haven’t been well-thought through,” said Stephen Wyatt, managing director for real estate broker Knight Frank Vietnam in Ho Chi Minh City. “A number of developments are on hold, purely because they have run out of funding. Banks are no longer willing to fund these massive developments.”

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Vietnam to Cut Corp. Income Taxes, Cap Loan Rates to Bolster Economy

May 4, 2012. Vietnam will cut income tax, defer sales tax payments and cap lending rates for some companies, stepping up efforts to bolster a slowing economy.

Corporate income tax for small- and medium-sized companies and labor-intensive enterprises will be cut by 30 percent, Vu Duc Dam, chairman of the government office, told a briefing in Hanoi today. Short-term commercial lending rates will be capped at 3 percentage points above the deposit rate limit for some sectors, according to a statement on the central bank website.

The new lending regulation will “help companies and citizens reduce borrowing costs, recover and maintain production and business operations, and support reasonable economic growth,” the central bank said.

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Vietnam banks cut commercial lending rates for businesses

Sep 9, 2011. Six Vietnamese commercial banks, including the country’s two biggest listed lenders, cut borrowing costs for businesses as the government strives to make credit cheaper to protect economic growth.

VietinBank, or Vietnam Joint Stock Commercial Bank for Industry & Trade, Joint-Stock Commercial Bank for Foreign Trade of Vietnam, also known as Vietcombank, and others lowered dong lending rates for loans to businesses and manufacturers to a range of 17 percent to 19 percent, according to a statement on the State Bank of Vietnam’s website today.

Asian nations from Vietnam to India face a growth slowdown as the global recovery falters, adding pressure to prop up expansion even as inflation remains elevated. Vietnam’s government, which faces a 23 percent inflation rate, said last month the central bank will keep policy interest rates unchanged for now and consider cutting them if price gains slow.

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Vietnam aims to cut bank lending rates to between 17 pct and 19 pct

HANOI, Aug 4. Vietnam’s central bank aims to get commercial bank lending rates down to between 17 percent and 19 percent, perhaps from next month, its new governor was quoted as saying in an online report, which helped lift stock prices.

Dong rates averaged 18.64 percent in July, with loans for the agricultural and export sectors at 16-21 percent, other production and business activities at 18-22 percent and non-manufacturing sectors at 20-25 percent, the central bank said in a monthly report on Wednesday.

The State Bank of Vietnam will work with banks to try to get rates down from mid-September, Governor Nguyen Van Binh was quoted as saying.

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Weekly Update Jun 02: US Business Mission, Independence Day Party

Keep up-to-date about U.S.-Vietnam trade and investment with Weekly Updates.

Upcoming Events and Activities (next two weeks)

Plan ahead. Click here to see all upcoming Events and Committee Meetings

We, Jun 18 Welcome reception for U.S. Commerce Assistant Secretary Hernandez and Business Mission with U.S. companies that represent a diverse cross-section of U.S. industries with a strong interest in doing business in Vietnam. Click the link for information on the mission and to register for the event.

List of companies participating in the Business Mission Companies include turbine electric power, construction materials, compatible consumer printing supplies, pelletizing and drying systems for the plastics industry, architect/design, satellite communications technology, personal care products, machine tools and manufacturing machinery, building cleaning service franchise, and more. Click the link for list of companies with links to their web sites to learn more about their products and services and to contact the U.S. Commercial Service about arranging an appointment.

Sa, 28 June 2008 Independence Day Celebration and Family Picnic Join us for an old-fashioned celebration with scrumptuous food, fun and games for children and parents, great door prizes, and good music at AmCham’s Annual Independence Day Celebration and Family Picnic. Limited to 600 AmCham Members and their Family and Guests. This week is the last chance for members to finalize sponsorship for the event, and sponsors’ logos will be printed on Tickets starting May 27. Tickets available on June 7.

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