|
Commercial banks lower lending rates
Commercial banks have followed this week’s move by the State Bank of Vietnam to trim a percentage point off the prime interest rate by slashing various Vietnam dong-denominated interest rate by as much as 2 percentage points, bringing average commercial lending rates down to between 15 and 18 percent per year.
State-owned banks – including Vietinbank, Mekong Housing Bank, the Bank for Investment and Development of Vietnam (BIDV), Agribank and Vietcombank – are now charging borrowers rates of around 15-16 percent per year.
Several joint-stock commercial banks have also trimmed lending rates to around 16-18 percent per year, including Sacombank, which on Nov. 5 cut its interest rates by 1-1.5 percentage points to 16-18 percent per year. Lien Viet Bank also cut lending rates to 15-16 percent, a 1.5 percentage point drop from the bank’s previous rates.
An Binh Bank (AB Bank) cut lending rates on Nov. 5 by 1-2 percentage points to 17.25-18 percent. A preferential interest rate of 16.75 percent per year will be given to the bank’s priority customers and exporters. The Hanoi-based bank has also allocated 1 trillion VND (over 59 million USD) for lending to small-and medium-sized enterprises over the next two months.
According to government statistics, the country has 349,000 small-and medium-sized enterprises, of which 163,000 had credit relations with banks.
Many economists believe that banks will make further interest rate cuts as they begin to accumulate capital again following the recent series of money-supply woes. Vietcombank general director Nguyen Phuoc Thanh estimated that domestic commercial banks now had about 50 trillion VND (nearly 3 billion USD) in capital on hand.
The State Bank’s reduction in compulsory reserve ratios this week was expected to free up additional liquidity of nearly 10 trillion VND (595.24 million USD), and the State Bank has also begun paying back about 20.3 trillion VND (1.21 billion USD) in compulsory notes to banks.
Briefly commenting on State Bank of Vietnam moves to improve capital liquidity in the domestic economy, Ayumi Konishi, country director for Vietnam of the Asian Development Bank, said,” Given the rapid improvement in inflation figures ... and in the face of what is happening in the global economy, as well as the difficulties being felt by Vietnamese banks and small-and medium-sized enterprises, it was considered appropriate to give some encouragement to the domestic economy”.
VNA
|
