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VND capital mobilisation race becomes hotter
The VND interest rate race has become hotter with new records for deposit interest rates having been set. Meanwhile, commercial banks have been pushing up interest rates on gold deposits.
The interest rate race, which was kicked off in April, has reached high tide with decisions on raising deposit interest rates made continuously in recent days. The highest deposit interest rate offered by a bank has climbed to 9.8 percent per annum.
On June 1, SeABank, VIB Bank, VietBank all began applying new interest rates with sharp increases in the rates of some terms of deposits, or issuing deposit certificates at high interest rates.
For example, SeAbank’s interest rates have increased from 7.2 percent per annum to 7.44 percent for one-month term deposits, from 7.8 to 8.04 percent for three-month term, from 8.1 to 8.34 percent for six-month and from 8.4 to 8.64 percent for nine-month term deposits.
At Vietbank, the interest rates have increased by 0.25-0.4 percent. VIB Bank has issued deposit certificates from June 1 to July 16, 2009 with the interest rate of 9.55 percent at the highest. The bank is applying the bonus interest rate of 0.3 and 0.45 percent for 24- and 36-month term deposits, which prove to be far higher than those offered by the deposit certificates of other banks.
The noteworthy thing is that the said banks just raised their deposit interest rates half a month ago.
Late last week, OCB announced its decision to raise deposit interest rates by 0.1-0.6 percent per annum applied to seven-month and longer term deposits.
The highest deposit interest rate now, reportedly at 9.8 percent, is applied to 36-month term deposit by HD Bank, valid as of May 28.
VP Bank, Saigon Bank, Techcombank and An Binh Bank have also announced increases of 0.2-0.5 percent per annum on all term deposits.
Analysts have said that deposit interest rates have become overly high if noting that the ceiling lending interest rate is 10.5 percent. This means that the margin between the deposit and lending interest rate is narrow, while banks have to pay many kinds of expenses. In principle, banks can apply the interest rates higher than 10.5 percent in consumer loans. However, the percentage of consumer loans among the total outstanding loans proves to be modest.
The interest rates also are tending to increase in the interbank market, according to the State Bank of Vietnam. The rate for 12-month term loans has soared from 1.16 percent to 8.9 percent.
In related news, commercial banks have been trying to raise interest rates on gold deposits.
Eximbank has launched onto the market a gold deposit programme, offering the interest rate of 4.5 percent for 3-month term deposits, an increase of 1.5 percent over the previous level. Viet A Bank has also raised deposit interest rates by 0.1-0.2 percent on all terms of deposits.
At Phuong Nam Bank, the rate for three-month term deposits has been pushed up to the highest level at 4 percent per annum.
Other banks have also been reportedly moving ahead with plans on raising interest rates on gold deposits.
Explaining the banks’ move, sources say that banks recently have exported several dozen tonnes of gold, which has led to a decrease in gold reserves. Meanwhile, gold depositors have been tending to withdraw deposits from banks to deposit at other banks offering higher interest rates.
VietNamNet, Media
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