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Interest rates on bank loans keep rising
Banks continue to increase interest rates on mobilized loans, sending them soaring almost non-stop.
According to the State Bank of Vietnam (SBV), the monetary situation was stable last week as interest rates offered by a number of commercial banks for VND capital mobilised on a 12 month or longer term only increased by 0.2-0.5 percent and now stand at 8.5-9 percent. In addition, banks have started to launch promotional programmes for depositors with a view to attracting more money sources in VND.
Loan interest rates were also steady last week with short-term lending rates fixed by State- run commercial banks ranging from 8.5-10 percent per year and 10-15 percent on medium and long-term loans. Meanwhile, loan interest rates from commercial joint stock banks stood at 10-10.5 percent and US$ loan interest rates somewhere between from 6-7 percent.
Many people have noticed with deep concern that the race will put pressure on banks to re-adjust their interest rates, thus affecting both businesses and the national economy.
The SBV has announced that the basic VND interest rate in May will remain at 7 percent. Accordingly, VND loan interest rates will be around 10.5 percent. However, many banks have recently increased their interest rates on mobilised loans nearly to the ceiling, from 8.6 to 9.7 percent/year for 24 and 36 month terms.
Through its programme “Super attractive saving 3+”, the Saigon and Hanoi Bank (SHB) has increased its interest rate for a 36-month term loan while the 9.7 percent mark has been broken after ANZ Bank ran a special promotion offering an interest rate of 10.5 percent.
Apart from mobilising capital inflow by increasing interest rates, banks have restructured mobilised loans and made full use of fixed assets to facilitate long-term loans.
Sharp increases in interest rates on mobilised loans aim to balance the saving and loan interest rates in order to keep customers while investments in stock market and gold trading are gaining momentum.
According to the Director of the SBV’s HCM City Branch, Nguyen Huu Hanh, outstanding credit debts in the entire SBV system have significantly risen since late March. In HCM alone, they have increased by VND15.857 billion, up 3.9 percent over 2008. The banks’ readjustment of their interest rates is normal as the capital disbursed under the Government’s stimulus package is rising. The move is also considered a step forward when the national economy is showing signs of recovery and needs an increase in capital.
Economic experts have predicted that the increase in interest rates will continue in the foreseeable future.
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