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VND deposit interest rates have new peak 8.7%
Commercial banks have raised the VND deposit interest rates drastically, kicking a new interest rate wave, the first one in 2009.
Not only joint stock banks, but state-owned banks have also joined the interest rate war. Analysts said that banks try to push up the capital mobilization in order to be able to prepare profuse capital in anticipation that the demand for capital will increase sharply in 2009.
Therefore, the interest rate increases have been applied to all terms of deposits, from weekly to 36-month terms.
Several days ago, Habubank created a new peak with the offered deposit interest rate of 8.4% per annum. Sacombank on March 12 caught the special attention from the public when announcing the high interest rate at 8.7% per annum for 36-month term deposit, which has been the highest peak until now.
The interest rates for other terms of deposits have also lifted by the bank, to 8% for 12-month term, 7.32% for 3-month, and 7.44%, 7.524% and 8.004% for 6-9-12 month term deposits, respectively.
At Viet A Bank, most of the deposits have seen the interest rates between 0.2-0.5%. It is noteworthy that the bank also applies attractive interest rates for short term deposits. One-week term deposits now enjoy the interest rate of 5% per annum, two-week 5.5%, and 3-week 6% per annum. The longer term deposits, from 12 to 36 months now have the interest rates of between 8.1% and 8.5%.
The race among commercial banks on VND capital mobilization has pushed the interest rates up in the last 2-3 weeks. Many commercial banks have raised interest rates by two folds, while considering further increases.
In HCM City, the Vietnam Tin Nghia bank is considered the bank which is now offering the highest interest rates: 7.6% for 1-and-2 month term deposits, 7.8% for 3-and-6-month, 8.0% for 9-month, and 8.2% for 12-month term deposits.
Sacombank is leading banks in terms of mobilizing long term deposits. However, bankers said that it is very difficult to mobilize long term capital at this moment.
Explaining the decision on raising interest rates by 0.1% to 0.9%, Nguyen Thi Bich Thuy, Deputy General Director of Habubank, said that the interest rate increases aim to help the bank keep stable number of regular clients and help ensure enough capital to provide to clients.
Habubank is also planning to issue promissory notes in VND with the total face value of VND 800 billion with the interest rates between 7.8%-8.4%.
Bankers said that they now need large volumes of capital as they have been pushing up loaning under the 4% interest rate subsidy program.
Le Quang Tri, General Director of Nam Viet Bank, said that interest rates have been increasing not because the mobilized capital decrease, but because of the increasing demand for loaning. After the Government decided to launch the interest rate subsidy program, a lot of businesses want to get loans to resume production. Moreover, a lot of banks have resumed their loaning to fund individuals’ consumption deals.
The Deputy General Director of a bank said that banks think that export-relating services will not bring high turnover this year due to the global economic recession. Therefore, banks have become focused on credit, which also explains why credit activities have become more bustling.
With the short term deposit interest rate of 8% as currently applied, bankers said they would be able to get profit from consumer credit, while they cannot get profit with funding business plans as the ceiling lending interest rate has been set at 10.5%. However, bankers said they would earn money from associated services.
Bankers also said that the VND capital demand has been increasing as businesses nowadays do not want to borrow in VND. Even import companies also want to borrow in VND and use VND to buy dollars for import. This has led to the fact that banks now have dollar capital in excess.
VietNamNet, LD
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