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Posts Tagged ‘deposit’

Banks bring deposit rates to below 15 percent

In Uncategorized on December 16, 2010 at 10:03 am

Commercial lenders lowered their interest rate on the dong deposits to 15 percent on Dec. 13 in accordance with their pleading at the meeting with the central bank earlier.

(Photo:Minh Tri)

Techcombank was among the first lenders reducing the deposit rate, offering the rate of 13.45-13.95 percent per annum.

The Hanoi-based lender, which is the fifth-largest bank in term of assets, triggered an interest rate race last week when announcing it would offer dong depositor rates as high as 17 percent per year.

Other lenders reacted by pushing their own rates up, some as high as 18 percent.
But these offers were rescinded after the central bank requested them to bring the rates down to prevalent market levels – 14 percent or less.

Asia Commercial Bank, known as ACB, also cut its highest deposit rate to 15 percent per year from 15.2 percent, which was earlier the special offering under its promotional pack titled “Making New Year fortunes”.

The government-run banks made a similar move, with Vietcombank lowering its deposit rate to 14 percent and BIDV cutting its rate to 13.5 percent.

Financial experts said the rate of 15 percent is adequate as lending demand at yearend is increasing sharply. However, they noticed that the current deposit rate would force lenders to raise their lending rates to 17-18 percent per year at least.

Vo Quoc Thang, chairman of the Vietnam Young Entrepreneurs Association, said with the lending rate of 17-18 percent per year, local businesses would struggle to cope with the increasing cost of raw materials and the harsh competition from imported products.

Many firms will be willing to make no profit this year to maintain their business, but this plan will be undone if the high lending rates last long, Thang said.

Many financial experts expected the interest rate would decline further on February as lending demand of local businesses cooled off.

They also said high interest rates will help lenders to separate borrowers. Lenders will offer regular and big clients loans with preferential rates. ACB offered an annual lending rate of 15.5 percent only to businesses.

Some small commercial banks, however, shunned the central bank’s request, keeping the interest rate on dong deposits at more than 15 percent. They said they offered the high rates for big deposits only.

These banks will negotiate the interest rate with clients in a face-to-face meeting only in attempt to avoid the central bank’s penalty.

A deputy general director of a commercial bank, who asked not to be named, disclosed many clients tended to deposit their money in the banks offering the highest rate. “Efforts to keep client from switching their money to other banks have seen many lenders offering the rate of more than 15 percent through negotiating,” he said.

Source: SGGP

Commercial banks raise VND deposit interest rate

In Uncategorized on November 9, 2010 at 8:51 am

Commercial banks raise VND deposit interest rate

In Uncategorized on November 8, 2010 at 5:12 pm

Deposit rates fixed; lending rates, USD price down

In Uncategorized on April 17, 2010 at 9:33 am

Most commercial banks have officially issued new interest rates on VND deposits and lowered lending rates to 15 percent, while the selling price of USD has declined to around VND19,000.

As of April 16, with the exception of a few banks applying deposit rates of 11.99 percent per year, the highest so far, the majority of banks fixed their rates at 11-11.5 percent.

Previously, most banks applied rates of 10.5 percent. But on top of this, they also added promotional rates to encourage depositors, meaning most account holders earned rates higher than 12 percent. Now, however, banks have put an end to such promotional programs.

As such, the newly announced deposit rates reflect  the exact interest that depositors will earn, said Duong Thu Huong, general secretary of the Vietnam Bankers’ Association.

Meanwhile, following a recent SBV circular on negotiable interest policy, many large commercial banks have agreed to lower lending interest rates to 15 percent per year on average.

Deals at a branch of Eximbank. Many banks lower lending rates to 15 percent on average, while the selling price of USD declines to around VND19,000  (Photo: SGGP)  

The Bank of Investment and Development of Vietnam (BIDV) fixed its maximum rate on short-term loans at 14 percent, while offering 13 percent to small- and medium-sized enterprises and businesses engaged in agricultural production and export. For medium- and long-term loans, the rate is 14.5 percent for borrowers engaged in production and trade.  

An Binh Commercial JS Bank (ABBank) is applying rates of 14-16 percent depending on the type of loan and client; and at Sacombank, the highest rate is set at 15 percent.

Financial experts forecast that lending rates could continue reducing in the future provided that inflation is under control.

Dr. Nguyen Tri Hieu, an independent member of the Management Board of ABBank, said, “The lending rate might be pushed down to less than 10 percent per year if the inflation rate is kept at 5 percent. In such conditions, the deposit rate could be 7 percent.”

In the past few days, the price of USD against VND has continuously declined at banks and on the open market as well. On April 16, one US dollar was selling for around VND19,000 at leading commercial banks, down VND20 from the day before.

On April 17, one US dollar sold for VND18,990-19,010 and was bought for VND18,920-18,950 at several banks.

Notably, at some points in recent days, the selling price of USD on the open market was lower than at commercial banks for the first time in the past three years.

The USD supply on the monetary market is currently quite abundant, the central bank has said, adding that some banks now have a USD reserve of $400-500 million.

The central bank attributed the positive situation to the ease of speculation of the hard currency by companies and individuals, considering it a result of the improved correlation between the foreign exchange market and bank interest rates.

Source: SGGP

Banks to reduce lending, deposit interest rates

In Uncategorized on April 15, 2010 at 11:31 am

Most banks have agreed to reduce the highest lending interest rates on VND loans to 15 percent while some will also lower deposit rates by 0.5 percent. The measures were announced at a conference held April 14 in Hanoi by the State Bank of Vietnam.

At the conference, SBV Governor Nguyen Van Giau presented a circular on lending under negotiable interest rates, asking commercial banks to publicly announce their rates.

Under the circular, the negotiable interest policy is now extended to short-term loans.

The applied interest must be determined on the current demand for loans, the basis of supply and demand, the integrity of borrowers, and the potential profitability for banks.

Loan interest rates must be affordable for borrowers, especially small- and medium-sized enterprises (SMEs), and agriculture and export businesses, the governor said.

After announcing the new interest rates, commercial banks must report them to the central bank, he added.

The central bank has issued a dispatch requiring the Vietnam Banking Association to take measures that ensure deposit and lending rates adopted by its members will benefit depositors, lender, and borrowers.

Deals at a Sacombank branch in Ho Chi Minh City(Photo: Sacombank) 

Long-term rates of 14.5-15 percent

During the conference, most banks agreed with recommendations from the SBV and the Vietnam Bankers’ Association that negotiable interest rates on short-term loans should initially be less than 14 percent per year and that rates on medium- and long-term loans should be 14.5-15 percent at maximum.

Several banks have already announced their new rates. For example, Agribank will apply a rate of 13.2 percent for agribusiness borrowers and 14 percent for exporters; and at BIDV, the rates are 13 and 12 percent respectively.

Meanwhile, Military Bank and Maritime Bank are offering loans to exporters at 13.7 and 12 percent per year respectively; and Sacombank will apply a rate of 13.8 percent for agribusiness borrowers, 14 percent for exporters, and less than 15 percent for other clients.

At ACB, the lending rate on short-term loans is set at 14-14.5 percent per year, while rates of 14.5 and 15-15.5 percent are offered on medium- and long-term loans.

Deputy general director of the Asia Commercial Bank (ACB), Do Minh Toan, forecast that lending rates will decrease by 1-1.5 percent to 13-14 percent per year in the near future – possibly the second quarter of this year. 

Mr. Toan said ACB has applied four lending rates based on client classification. Accordingly, a rate of 13.8 percent is applied for borrowers with a long, positive credit history with the bank; 14 percent is applied for regular customers; 15 percent is applied for SMEs; and 15-16 percent is applied for individual borrowers.

Nguyen Hao, director of the Hoang Tan Printing and Sewing Co., Ho Chi Minh City, said, “I hope that by mid-year, when we begin fulfilling our orders, the lending rates will go down to 10 percent per year, since we cannot afford loans at higher rates.” 

Meanwhile, Le Van Truong, deputy chairman of the Management Board of Khanh Hoi Import-Export JSC, HCMC, said, “Recently, our forestry processing enterprise in Binh Duong Province has been progressing  sluggishly while waiting for a reduction in lending interest rates. I hope that in June, when the enterprise’s operations peak, lending rates will further drop to 12 percent per year – the maximum rate we can afford.”

New deposit interest rates

Also during the conference, banks agreed to reduce deposit interest rates by 0.5 percent per year from the current maximum rate of 12 percent. Soon after that, many commercial banks announced their new range of deposit interest rates, with the maximum being less than 12 percent per year.

Viet A Bank will offer a deposit interest rate of 11.8 percent per year for a 12-month account; while the rates for accounts of three, six and nine months are set at 11.5, 11.6 and 11.7 percent respectively. For one-month deposits, the rate is 11 percent. 

With this range, the bank will find it easier to mobilize idle money than previously when a ceiling rate of 10.5 percent was applied.

At Eximbank, the maximum deposit interest rate is 11.5 percent per year for a 12-month account; while the rates for three-, six- and nine-month deposits are 11.40, 11.43 and 11.45 percent respectively.

Sai Gon Thuong Tin, meanwhile, will offer lower rates of 11.1 percent for a one-year account and 10.56 percent for one-month deposits.

Mr. Toan of ACB said that many commercial banks want to reduce deposit rates slowly, fearing that a one-time reduction will discourage depositors, causing a decline in banks’ capital mobilization.

Source: SGGP

Banks hike deposit interest on high credit demand

In Vietnam Banking Finance on September 9, 2009 at 2:51 am

With demand for credit remaining high, banks have scrambled to raise deposit interest rates to mobilize funds.

Transaction conducted at a Sacombank branch in Ho Chi Minh City

The highest rate offered now is 10.3 percent, close to the ceiling lending rate of 10.5 percent, which is 150 percent of the central bank’s interest rate.
Ho Chi Minh City Housing Development Joint-stock Bank offers 10.3 percent for a 36-month term.
Saigon Commercial Bank offers 10 percent for 13- to 24-month terms and Saigon-Hanoi Bank has raised its rate to a maximum of 9.65 percent.
Besides hiking interest rates, banks are also offering a slew of promotions.
Techcombank presents gifts to clients who deposit over VND20 million.
Sacombank has announced a lottery for depositors with a special prize of a BMW car worth VND1.4-billion besides many other prizes.

Source: SGGP