Banks further hike gold deposit rates

Several banks have continued to raise interest rates for gold deposits to between 1 percent and 2 percent per annum from just 0.1 percent a month ago.

The highest gold rate is offered by Nam Viet Commercial Bank, at 2 percent per year for the 11-month term, 1.5 percent for the three-month term, and 1.55 percent for the six-month term.

The race to hike gold rates was triggered two weeks ago when Asia Commercial Bank (ACB) and Vietnam Export Import Commercial Bank (Eximbank) boosted deposit rates for gold to around 1 percent. ACB offered 1.1 percent per year for a three-month term while Eximbank quoted it at 1 percent for a one-month term.

ACB on Monday heated up the race by raising the annual interest rate by between 73 and 85 basis points to 1.35 percent for the 12-month term and 1.3 percent for terms of three, six, and nine months.

Late last week, Southern Commercial Bank also revised up its gold deposit rate with the highest level being 1.5 percent per year for terms longer than five months. Sacombank now mobilises the yellow metal at 1 percent per year for a three-month period.

A banker in HCM City’s District 1 said the higher deposit rate was offered to attract more gold to meet the rising demand.

“Many people think the gold price has hit the ceiling so they want to borrow gold now to enjoy a lower lending rate (compared to dong or the US dollar),” he said.

Mobilising more gold and dollars at this time will also help banks improve their current capital pools to meet a new rule on keeping the loan-to-deposit ratio at no more than 80 percent under the central bank’s Circular 13, he explained.

According to the central bank’s HCM City Branch, as of end-August, the loan-to-deposit ratio of banks in the city had been about 96.3 percent, as mobilised funds totalled 683.5 trillion dong compared to outstanding loans of 623.1 trillion dong.

Ho Huu Hanh, director of the branch, said gold deposits made up 10 percent of the total mobilisation by credit institutions in the city.

Hanh commented on the ‘gold rush’ that many banks who had sold mobilised gold earlier to take dong for lending now had to draw more gold to offset the loans made.

As the dollar and gold interest rate are increasing now, banks find it hard to lower the lending rate in near term as told by the central bank, said a banker in HCM City. – Saigontimes

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