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Banks enter capital mobilization race
The Saigon Times Daily
Friday,  Mar 9, 2018,21:37 (GMT+7)

Banks enter capital mobilization race

The Saigon Times Daily

HCMC – Many commercial banks have hiked their annual deposit rates for different tenors and offered numerous promotions since early this year to raise more capital, Nguoi Lao Dong newspaper reports.

According to the National Financial Supervisory Commission, the annual average deposit rate for savings of more than 12 months was 6.55% in the first two months of the year, up three basis points over the end of last year.

Orient Commercial Joint Stock Bank (OCB) has revised up its interest rates for savings of six to 11 months to 7%. As for the 13-month term, the rate is 7.9% for deposits of at least VND100 billion.

Some small and medium joint stock banks have also raised their interest rates to the upper limit of 5.5% for tenors of less than six months. At Viet Capital Bank, the rates are 8.3% and 8.5% for 13- and 15-month deposits respectively.

DongA Commercial Joint Stock Bank has hiked its deposit rates by 60 basis points for six-month savings to 6.9%.

Meanwhile, HCMC Development Bank (HDBank) offered a promotion for individual customers of 28 years old or older who make deposits of six or 13 months. Such customers will be entitled to a maximum of 70 basis points higher than the normal interest rates of 6.4% and 7.2% respectively for six- and 13-month savings.

Some large commercial banks also have pushed up their deposit rates. It is noteworthy that the difference between the rates at small joint stock banks and large commercial banks amounts to 2.3-2.6%.

For example, Vietcombank, BIDV and VietinBank offer a rate of 4.8-5.1% for six-month savings while the rate is 7-7.4% at Viet Capital Bank, NCB, DongA Bank, OCB and SCB.

According to data of the National Financial Supervisory Commission, capital mobilized from economic organizations and individuals grew by 0.5% in the last two months compared to the end of last year. The abundant liquidity in the banking system is thanks to SBV’s purchase of a large amount of foreign currencies and a net injection of VND70 trillion into the market in January-February.

Can Van Luc, a banking-financial expert, said banks have hiked deposit rates to raise more capital to achieve their credit growth goals and restructure their long-term capital. HSBC CEO Pham Hong Hai said the increasing demand for capital has forced banks to revise up their savings rates.

Despite higher savings rates, lending rates may not go up as the central bank has asked commercial banks to reduce operating costs and lending rates, said Luc.

It is difficult to cut lending rates this year due to increasing costs for capital mobilization and low lending rates which have been offered to creditworthy customers. In addition, banks will not increase lending rates to retain customers.

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