Commercial banks hike interest rates

Immediately after the State Bank of Vietnam decided to raise interest rates by 1% to 9% per year, a series of commercial banks started to hike new interest rates on the market.

On November 6, commercial banks, including Maritime JS Bank, WesternBank, and DongABank pushed up their deposit interest rate in dong for all terms to 12% per year, higher than the top rate of 11% per year reset by the SBV a few days ago.

Apart from the aforementioned deposit interest rate of 12% per year, in a bid to stimulate depositors, Western Bank even donated more different kinds of gifts with a value of 0.7% per year to 3% per year calculated on deposits. Real interest rates in the market, therefore, are also likely to exceed 12% per year.

State-run commercial banks also quickly made upward adjustments in loan and deposit interest rates. Amongst these, Bank for investment and Development of Vietnam (Bidv) has announced it would apply deposit interest rates around 12% per year from November 8.

In addition, Vietcombank and Vietinbank have yet to make any specific move on interest rates.

Ocean Bank is the latest commercial bank that has announced interest rate hikes, of which this lender applies the deposit interest rates of 12% per annum for the entire periods from 1 month to 36 months.

An above change indicated that when the input rate is increasing sharply, the lending rates of commercial banks will be certainly rebounded again with an increase of at least another 1% per year compared with the previous interest rates.

The Government’s expectation to cut down further lending interest rates seems unrealistic now. BIDV is seen as the first bank announcing the new loan interest rates, of which the lender fixed a short-term loan interest rate of 12.75% per annum for export financing and normal short-term lending rate of around 14% per year.

The interest rates for medium and long-term loans are calculated by Bidv as follows: savings interest rates of 12 months were added with another 3.5% per year. With the ceiling deposit interest rates of 12% per year, Bidv’s highest interest rate will be increased to 15.5% per year.

Earlier, as calculated by the head of the National Financial Supervision Committee -Le Duc Thuy -when interest rates are at about 12-13% per year without any additional fee, the average interest rate at between 15% -17% per year on the market is acceptable. In fact, before the central bank made its upward adjustments in key interest rates, the loan interest rates on the market at levels were already close to 15-17% per year. – Laodong

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