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Banks raise deposit interest rates
Many local banks have further increased their deposit interest rates to meet the increasing demand for capital, according to the State Bank of Viet Nam.
The central bank says interest rates for dong deposits at local commercial banks have increased recently by between 0.2 and 0.3 per cent.
At State-run commercial banks in particular, interest rates on dong deposits with terms of three, six and 12 months now are 6.91,7.25 and 7.58 per cent per year, respectively.
Meanwhile, the corresponding, dong deposit rates at joint stock commercial banks are 7.45, 7.79 and 7.8 percent per annum.
The Sai Gon Thuong Tin Commercial Joint Stock Bank (Sacombank) offers the highest annual interest rate of 8.7 per cent for a 36 month deposit. The Hanoi Housing Development Commercial Joint Stock Bank (Habubank) offers 8.4 per cent for similar term deposits.
The Viet A Commercial Joint Stock Bank has already raised its deposit rates by between 0.2 and 0.5 per cent.
Independent market watchdogs say that many local banks have had to raise their deposits rates since demand for dong loans from individuals and enterprises have increased, while many old deposits with high-interest rates have matured.
They also say that local commercial banks' profits from their credit activities show signs of increasing.
In the first two months of the year, Sacombank made a total VND222.8 billion (US$12.8 million) in profits, 50 per cent of which was from credit activities. A similar contribution to its profits has been reported by the Eastern Asia Commercial Bank. Profits earned by the Asia Commercial Joint Stock Bank was estimated at VND400 and 450 billion ($25.7 million) in the first two months, with a considerable amount raised through its credit services.
In related news, rates on dollar deposits this week slightly decreased over the last week, with the cuts of between 0.1 and 0.2 per cent. Last week, the rates on short-term loans at state-run commercial banks were between 8.5 and 10 per cent per year, and between 10 and 10.5 per cent for long and medium-term loans.
VietNamNet, Viet Nam News
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