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Friday,  Jul 21,2017,21:31 (GMT+7)

Banks cut interest rates

Thanh Thuong
Wednesday,  Jul 12,2017,00:01 (GMT+7)
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Banks cut interest rates

Thanh Thuong

Customers transact with LienVietPostBank. Banks have lowered interest rates after the State Bank of Vietnam cut interbank lending rates by 25 basis points and maximum short-term interest rates by 50 basis points - PHOTO: TL

HCMC - Banks have announced new interest rates that are even lower than the short-term interest rate ceiling for clients in priority groups.

Their rate cuts come after the State Bank of Vietnam lowered interbank lending rates by 25 basis points and maximum short-term interest rates by 50 basis points, with effect from July 10.

Vietnam Prosperity Commercial Bank (VPBank) has introduced a program to slash short-term interest rates for small and medium enterprises (SMEs), one of the five priority groups listed in the central bank’s Circular 39/2016/TT-NHNN, including businesses active in agriculture, export and supporting industries, small and medium enterprises, and hi-tech firms.

In particular, interest rates for short-term loans for SMEs fell by 50 to 100 basis points. New interest rates are applicable from July 10.

State-owned agriculture bank Agribank reduced short-term rates from 7% a year to 6.5% and medium and long-term rates from 8.5% to 8% for well-performing enterprises.

Meanwhile, LienVietPostBank cut interest rates by 25 basis points for loans of all tenors for enterprises rated AA or higher. The bank charges a maximum interest rate of 6% on short-term loans for priority groups of clients.

Bank for Investment and Development of Vietnam (BIDV) now applies an annual interest rate ceiling of 6.5% to short-term loans for priority sectors.

Speaking to the Daily, Vo Tan Hoang Van, general director of Saigon Commercial Bank (SCB), said the bank will cut interest rates by 50 basis points for all loans. Van said the interest rate cut is inevitable given low inflation, ample money supply and high economic growth.

The interest rate reductions may lead to credit growing strongly in the second half of 2017, said Nguyen Hoang Minh, deputy director of HCMC branch of the State Bank of Vietnam. As of late June, loan growth in the city was about 10% compared to early 2016. By the end of this year, credit could rise 18% year-on-year.

Minh said some banks might see a fall in net interest revenue, affecting their after-tax profits.

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