Since October 15, under the consensus amongst member banks of Vietnam Banking Association, banks would have to lower interest rates to 11 percent, but at this present time, there have been only a few banks that reported lower deposit interest rates.
Keeping with the first prestige, Asia Commercial JS Bank (ACB) has come to apply the new interest rates from October 15. Accordingly, the 3 to 12 month saving interest rate of this bank should be equal to 10.88 percent a year.
The highest dong interest rate of ACB, which is now 11 percent per year, is applied to 36-month savings products with floating rate. Similarly, Vietnam's Eximbank has also offered 11 percent per annum for a term of from one to 12 months.
Vietcombank also said, that on October 16 the bank adjusted down the lending rates in dong, with the lowest rate down to only 11.5 percent per year.
Deposit interest rates were also lowered by Vietcombank as the one to less than 3 month interest rate was cut down to 10.8 percent, along with 12 month interest rate down to 10.5 percent per, terms of 3 months, 6 months and 9 month with the same interest rate of 11 percent per year.
Nguyen Phuoc Thanh, general director of Vietcombank, said with the initiative to reduce lending rates, Vietcombank desires to strengthen access to capital credit businesses, especially small and medium enterprises, and enterprises producing goods for export business and support agriculture and rural development. Vietcombank committed to continuing to support and share difficulties with customers and businesses, contributing to maintain stability and economic growth in 2010 according to the direction of the government.
The state-run Mekong Delta Housing Development Bank (MHB) has also reported making dong reduction in interest rates for some groups of businesses.
Specifically, the lender has reduced loan interest rates from 14.5 percent a year down to 12 percent - 12.5 percent per annum for manufacturing companies and enterprises in the agriculture sector, while it also cut down the lending rate from 16 percent a year down to 13 percent - 14 percent per annum for real estate companies.
MHB said it will prioritise the preferential interest rates to borrowers for the construction of industrial zones, investment projects in key residential and infrastructure construction for local socio-economic development plans.
Meanwhile, some other banks have not officially announced the reduction of interest rates from October 15 as agreed with the VNBA. According to sources from An Binh Bank and Sacombank, the two banks will only offers new interest rate tables in two weeks after the consensus.
When asked why not to reduce interest rates, some banks have said that they are waiting to "learn" from other banks. If interest rates decline so rapidly, capital will straight away flow to bank rivals.
According to statistics from the State Bank of Vietnam, dong interest rates tend to decrease slightly due to a number of joint-stock commercial banks that have reduced lending rates for the manufacturing sector - business. Lending rate in dong of state-owned commercial banks for agricultural production and rural development and export is 11-14 percent per year (short term), from 12.5 to 14.5 percent per year (medium and long term), while the interest rate of joint stock banks is from 11.5 to 14.5 percent per annum (short-term) and from 13.5 to 15.5 percent per year (medium and long term).
However, according to experts' assessment, the dong loan and deposit interest rates of credit institutions to their clients only witnessed a modest decline compared to the target as well as expected. With many changes in a number of banks, the dong interest rates are ranged between 10.59 to 11.2 percent and only down about 0.2 to 0.3 percent per year compared to the end of June 2010.
The interest rate be reduced only in group of primary customers in the fields of agricultural production and rural exports. But other areas are still subject to high interest rates from 13 to 15.5 percent per year.
Duong Thu Huong, Secretary general of the Vietnam Banking Association said, in a bid to reduce interest rates quickly in the near future, immediately to closely monitor market fluctuations, and inflation to consider cutting input costs, because capital needs of the economy generally fall in the fourth quarter, banks should increase the mobilised amount.
In the spirit of the consensus of bank members' expectations, interest rates will fall further in the future, but a reality to which they must depend on many factors. In particular, the first factor is inflation, but in late September, inflation is tending to rise. Thus, commercial banks have also to watch out markets to adjuste down interest rates further.
Huong admits, the consensus to reduce interest rates for banks is a difficult task now. VNBA will be responsible for direction and calling, but how the performance depends on the market. During this time, it would be great if banks have done this task, but if any bank find it too difficult to reduce interest rates, this shows that they are having difficulty in raising capital.
Keeping with the first prestige, Asia Commercial JS Bank (ACB) has come to apply the new interest rates from October 15. Accordingly, the 3 to 12 month saving interest rate of this bank should be equal to 10.88 percent a year.
The highest dong interest rate of ACB, which is now 11 percent per year, is applied to 36-month savings products with floating rate. Similarly, Vietnam's Eximbank has also offered 11 percent per annum for a term of from one to 12 months.
Vietcombank also said, that on October 16 the bank adjusted down the lending rates in dong, with the lowest rate down to only 11.5 percent per year.
Deposit interest rates were also lowered by Vietcombank as the one to less than 3 month interest rate was cut down to 10.8 percent, along with 12 month interest rate down to 10.5 percent per, terms of 3 months, 6 months and 9 month with the same interest rate of 11 percent per year.
Nguyen Phuoc Thanh, general director of Vietcombank, said with the initiative to reduce lending rates, Vietcombank desires to strengthen access to capital credit businesses, especially small and medium enterprises, and enterprises producing goods for export business and support agriculture and rural development. Vietcombank committed to continuing to support and share difficulties with customers and businesses, contributing to maintain stability and economic growth in 2010 according to the direction of the government.
The state-run Mekong Delta Housing Development Bank (MHB) has also reported making dong reduction in interest rates for some groups of businesses.
Specifically, the lender has reduced loan interest rates from 14.5 percent a year down to 12 percent - 12.5 percent per annum for manufacturing companies and enterprises in the agriculture sector, while it also cut down the lending rate from 16 percent a year down to 13 percent - 14 percent per annum for real estate companies.
MHB said it will prioritise the preferential interest rates to borrowers for the construction of industrial zones, investment projects in key residential and infrastructure construction for local socio-economic development plans.
Meanwhile, some other banks have not officially announced the reduction of interest rates from October 15 as agreed with the VNBA. According to sources from An Binh Bank and Sacombank, the two banks will only offers new interest rate tables in two weeks after the consensus.
When asked why not to reduce interest rates, some banks have said that they are waiting to "learn" from other banks. If interest rates decline so rapidly, capital will straight away flow to bank rivals.
According to statistics from the State Bank of Vietnam, dong interest rates tend to decrease slightly due to a number of joint-stock commercial banks that have reduced lending rates for the manufacturing sector - business. Lending rate in dong of state-owned commercial banks for agricultural production and rural development and export is 11-14 percent per year (short term), from 12.5 to 14.5 percent per year (medium and long term), while the interest rate of joint stock banks is from 11.5 to 14.5 percent per annum (short-term) and from 13.5 to 15.5 percent per year (medium and long term).
However, according to experts' assessment, the dong loan and deposit interest rates of credit institutions to their clients only witnessed a modest decline compared to the target as well as expected. With many changes in a number of banks, the dong interest rates are ranged between 10.59 to 11.2 percent and only down about 0.2 to 0.3 percent per year compared to the end of June 2010.
The interest rate be reduced only in group of primary customers in the fields of agricultural production and rural exports. But other areas are still subject to high interest rates from 13 to 15.5 percent per year.
Duong Thu Huong, Secretary general of the Vietnam Banking Association said, in a bid to reduce interest rates quickly in the near future, immediately to closely monitor market fluctuations, and inflation to consider cutting input costs, because capital needs of the economy generally fall in the fourth quarter, banks should increase the mobilised amount.
In the spirit of the consensus of bank members' expectations, interest rates will fall further in the future, but a reality to which they must depend on many factors. In particular, the first factor is inflation, but in late September, inflation is tending to rise. Thus, commercial banks have also to watch out markets to adjuste down interest rates further.
Huong admits, the consensus to reduce interest rates for banks is a difficult task now. VNBA will be responsible for direction and calling, but how the performance depends on the market. During this time, it would be great if banks have done this task, but if any bank find it too difficult to reduce interest rates, this shows that they are having difficulty in raising capital.
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