UPDATE 1-Vietnam H1 loans up 20 pct, June credit slows-c.bank

(Adds details, foreign reserves, analyst's quote)

HANOI, June 20 (Reuters) - Outstanding bank loans in Vietnam are likely to be 20 percent higher at the end of the first half than a year earlier, but monthly loan growth will slow to 1.22 percent in June, a central bank newspaper said on Friday.

The figures suggest the central bank has had some success in bringing down rampant credit growth in an overheating economy in which the annual inflation rate has soared to 25 percent.

"Outstanding loans rising 19.99 percent is still higher than growth in the same period last year but it is on a gradual falling trend," the Banking Times newspaper, run by the State Bank of Vietnam, quoted a central bank report as saying.

Credit growth in May compared with April was 2.25 percent, down from 3.36 percent in April and 3.78 percent in March, State Bank of Vietnam Governor Nguyen Van Giau told the National Assembly in May.

The report did not give loan values but central bank figures released in late May suggested outstanding loans at the end of June would reach 1,290 trillion dong ($78.4 billion).

The central bank did not give the credit growth for the first half of 2007 but loans surged 54 percent in the whole of 2007, so the 20 percent growth so far this year shows a dramatic fall after three rate increases since January by the central bank.

"This does suggest a moderation in growth, basically," said CSFB economist Joseph Lau, noting that average monthly credit growth was 3.5 percent in the first five months of 2008.

"So, if June is sustained, then it does at least suggest some degree of moderation and some impact from the tightening measures you saw both in March and in May," he said.