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Bank interest rates continue sliding
Joint-stock banks have followed state-owned banks in cutting deposit interest rates. The common interest rate is now 16% per annum, a considerable decrease from the highest peak of 19% seen four months ago.
SeABank has been offering new interest rates since October 15. The bank’s highest rate is 16.8% applied for 3-month term deposits, while lower rates of below 14% are being applied to 7-13 month term deposits.
SeABank is the bank which offered the record high interest rate of 19.2% in June.
VP Bank adjusted its interest rates on October 9, right after the meeting of northern banks called by the Vietnam Banking Association. VP Bank’s 3-month term deposit interest rate is lower than that offered by SeABank, at 16.6%. Clients who make 1-year term deposits will enjoy the rate of 16%. The lowest rate of 12.5% is now applied for the long-term 36-month deposits.
Joint-stock banks in the south have slashed interest rates more sharply. On October 10, Eximbank announced the interest rate cut to below 16%. The highest rate of 15.99% is being applied to 2-3-4 month term deposits. The rate of 12% is applied for 24-month and longer-term deposits. Meanwhile, the highest rate offered by ACB is 15.8%, and the lowest 12.5%.
Commercial banks have every reason to slash deposit interest rates. Capital has become more profuse, while liquidity has become better as the State Bank of Vietnam has decided to raise the interest rates on compulsory reserves. Inflation has been controlled. Meanwhile, as other investment channels like the stock market and real estate are not bringing in profit, people are not keen on investing in those channels.
Commercial banks themselves want to reduce capital mobilisation costs in order to push up loaning in the last months of the year.
The Vietnam Banking Association, after the meetings with southern and northern members, released a document urging banks to adjust interest rates to fit the new circumstances and support businesses.
Analysts believe that other sharp decreases in interest rates will occur in the time to come, especially as the State Bank of Vietnam yesterday decided to slash the basic interest rate from 14% to 13%, which is understood as an action to gradually loosen monetary policies.
VNN
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