Lending interest rate stays high

The lending rates will not be reduced soon as banks are confronted with liquidity problems, the local newspaper Saigon Economic Times quoted financial analyst Pham Do Chi, as saying.

The lending rates will not be reduced soon as banks are confronted with liquidity problems, the local newspaper Saigon Economic Times quoted financial analyst Pham Do Chi, as saying.

A local bank said that it could not provide loans at 17-19% as it was facing massive withdrawal of depositors, up to tens of billions of dongs per day. The bank did not put an emphasis on lending as its credit growth approached 20%, Deputy Director of the bank added.

At an unnamed small bank, only 5% of firms had access to funds at 19% per annum, said a manager of the bank, adding that as much as VND2 trillion was withdrawn since rate caps were strictly reinforced.

Small banks are said to break the rate caps to deal with current liquidity problems, preventing them from reducing lending rates, the newspaper reported.

Lending interest rates may fall at the beginning of 2012 as the earliest, commented Truong Van Phuoc, CEO of Eximbank.

Source Sophie/ News Writer/ StoxPlus

Tags: Lending interest rates, Vietnam banking industry, Vietnam finance, Vietnam financial

Posted by VBN on Oct 12 2011. Filed under Banking-Finance. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry