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Banks raising deposit interest rates to retain clients
Though commercial banks do not have many borrowers, they still have decided to raise deposit interest rates in order to attract depositors, as bank deposits have become less attractive than other investment channels.
Huynh Song Hao, Deputy General Director of the HCM City branch of Vietcombank, said that more businesses have registered to borrow capital under the 4% interest rate subsidy programme, but the number of businesses which meet the requirements to be eligible for loans remains unchanged. Therefore, the bank’s outstanding loans have not increased significantly.
However, Hao said that some commercial banks still have raised deposit interest rates because they want to attract more depositors and retain loyal clients.
Some banks have launched attractive promotion programmes aiming to lure depositors. Saigon Commercial Joint Stock Bank (SCB), for example, has decided to prolong its promotion programme to June 30 instead of April 29 as previously planned.
Under the programme, those who open less-than-6-month term deposits will be given 0.03%-0.15% of their deposits’ values. The gift will be 0.2% for 6-month-term deposits. If clients deposit all the principal and interest they get for three months or more, they will get the bonus interest rate of 0.6% per annum.
Tran Ngoc Tam, Deputy General Director of Nam A Bank, said that his bank does not need to push up capital mobilisation as it still has enough capital for loaning, but it has still decided to follow other banks in raising deposit interest rates. If the bank did not raise deposit interest rates, depositors would leave Nam A for other banks.
According to Tam, in the first three months of the year, the total capital mobilised by the bank increased by 10% over the end of last year, much lower than the targeted plan. The outstanding loans increased at the same rate.
Meanwhile, the director of a branch of ACB Bank said that banks have raised deposit interest rates because they want to get more capital for consumer loans. A lot of commercial banks have been pushing up consumer credit; they can lend at interest rates higher than the allowed ceiling rate at 10.5% per annum.
According to Vo Van Chau, General Director of Orient Bank (OCB), more individuals are now asking for loans to repair their houses as construction material prices have been decreasing.
“As we have been pushing up consumer credit, we have raised deposit interest rates,” Chau said.
Currently, the deposit interest rates offered by commercial banks are between 7% and 8.5% per annum. Small banks always offer interest rates that are higher than those of bigger banks.
VietNamNet, TBKTSG
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