Many banks lower dong deposit rates
The Saigon Times Daily
HCMC - While some banks are racing to issue certificates of deposit with interest rates of more than 9% per year, quite a few others have brought down their interest rates for savings in Vietnam dong by 0.1-0.3 percentage point, says Dan Tri news site.
VPBank has reduced its deposit rates by 0.1-0.3 percentage point for all tenors. Thus, the annual interest rates for savings of seven, 12 and 15 months are now 6.9%, 7.1% and 7.3% respectively.
At Viet Capital Bank, the interest rate for six-month deposits in dong has fallen 0.1 point. Longer tenors of 18 to 60 months are now offered a rate of 7.8% per annum.
Similarly, Vietbank has lowered its deposit rates by 0.1-0.3 percentage point for seven-month, 12-month and 15-month terms. VIB has also revised down the rates by the same margins for all terms, with the sharpest cut applied to 3-5 month terms.
Maritime Bank has decreased its deposit rates for 18-36 months from 7.4% to 7.2%. DongA Bank has announced an interest rate reduction of 0.1 percentage point for one-month savings.
Many banks have launched deposit certificates with high interest rates, up to 9% per year, such as Sacombank, LienVietPostBank and VPBank.
But not all certificates of deposit come with tenors of five to seven years as those released by Sacombank. Viet A Bank, for example, only offers terms of six to 18 months with interest rates of 6.9-8.2% per annum.
Some banks such as DongABank and SCB even apply attractive interest rates of 5.4-5.5% a year to short terms of 1-4 months. The 6-9 month tenors come with an annual interest rate of 6.9%.
Inflationary pressure in the first two months of the year (a total rise of 0.7%) is another factor forcing banks to consider adjusting their interest rates as depositors’ expectations change.
Baoviet Securities Company (BVSC) attributed higher interest rates to banks restructuring their funds as Circular 06 on lowering the percentage of short-term capital for medium- and long-term loans from 60% to 50% officially came into force in early 2017.
The final factor is the external pressure from the Fed’s interest rate hike roadmap. It is expected that after the increase on March 15, the Fed will carry out two more rate hikes this year and three more in 2018.
BVSC says that if the ceiling interest rates on foreign currency deposits at home remain at zero, overseas remittances and indirect investment will likely undergo a certain degree of reversal.
However, a representative of the State Bank of Vietnam deemed it very normal that banks adjust their interest rates according to their business strategies and market conditions. Due to the need for capital at a certain time, a number of joint stock banks may put up their interest rates partially and temporarily, and later bring them down in accordance with market supply and demand.
“In fact, the liquidity of the entire banking system is still ample, and the market is under no pressure to raise interest rates. Therefore, in general, the deposit and lending interest rates at joint stock banks remain stable,” the State Bank of Vietnam confirmed.