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Banks to cut dong deposit rates further
Vietnamese banks, strained by high dong interest rates this year, are expected to cut rates on dong deposits further in the coming weeks due to ample liquidity and as they move to boost profits, bankers said.
They said overnight rates on dong loans had stabilized with banks fixing deals at around 16 percent this week, compared with around 14-17 percent last week.
“The trend to cut rates on dong deposits is very clear as banks have raised sufficient dong funds and now they need to increase margins to stay in business,” a banker at a foreign bank in Ho Chi Minh City said.
Another banker said lenders would be operating at a loss if they had to pay 19-20 percent interest on dong deposits and lend at the regulated limit of 21 percent per year.
Bankers at the partly private Military Bank said the lender had cut annual interest rates on 12-month dong deposits to 17.5 percent last week from more than 18 percent previously.
The Hanoi-based bank had also cut rates on dollar deposits to 6 percent from around 8 percent previously.
The dominant Vietcombank also said it had cut rates on dong deposits to 17 percent for 12-month deposits and 16.5 percent on deposits with maturity from 24-60 months, reflecting its expectation that rates would fall further in the long run.
Meanwhile, even though some banks said they had reduced the prime dong loan rates to around 18 percent, the rates for non-prime clients remained at 21 percent per year, the ceiling lending rate allowed by the central bank.
“We will still apply the maximum interest rates allowed by the central bank on dong consumer finance loans in the immediate future and there is no plan to cut the rates yet,” a Hanoi-based banker said.
The central bank set the mid-rate for the dong at VND16,498 per dollar, almost unchanged from a week ago while the rates were also stable on the black market at around VND16,660 dong per dollar.
Thanhnien
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