Saturday,  Nov 17, 2018,19:59 (GMT+7) 0 0
Major banks join race to hike deposit rates
The Saigon Times Daily
Friday,  Sep 7, 2018,18:55 (GMT+7)

Major banks join race to hike deposit rates

The Saigon Times Daily

A bank teller counts banknotes. Large commercial banks have adjusted upward their annual deposit rates - PHOTO: THANH HOA

HCMC – A few large commercial banks have adjusted upward their annual deposit rates following a hike in rates among small banks for call deposits of less than six months since mid-August, according to news website Vietnamplus.

At Bank for Foreign Trade of Vietnam, the deposit rate for 12-month savings has been raised to 6.5% from 6.4%.

Previously, Vietnam Bank for Industry and Trade, Vietnam Bank for Agriculture and Rural Development and Bank for Investment and Development of Vietnam (BIDV) had also hiked their deposit rates by 10-20 basis points.

Since September 5, BIDV has encouraged its clients to make deposits at the bank through BIDV SmartBanking, BIDV Online and BIDV Bankplus services by raising the interest rates by 20 basis points for tenors of more than 12 months and by 10 basis points for the remaining tenors.

According to financial expert Nguyen Tri Hieu, large banks are also seeking ways to mobilize capital as the State Bank of Vietnam (SBV) has applied quantitative restrictions by allowing banks to use only 40% of the short-term capital for long- and medium-term loans from early next year instead of 45% as previously done.

Meanwhile, banks have increased the deposit rates to meet the high demand of enterprises for capital for their operations next year.

Some other banks, on the other hand, have lowered the rates. Vietnam Prosperity Bank, for example, has reduced the deposit rates by 20-50 basis points for most of the tenors.

The bank’s deposit rates for savings of one to six months are now 4.6-4.7%, down by 20 basis points, while the rates for savings of six months or more are 6.2-6.7%, a decline of 50 basis points.

Despite the high capital demand, the credit growth limits set for many banks are low, at 10-11%, while many of them have almost reached the lending cap. Therefore, many banks have no plans to mobilize short-term capital, Hieu noted.

In addition, fluctuations in the interest rate have been triggered by uncertainties in the global economy, especially the United States-China trade war.

The interbank market also saw a high deposit rate of more than 4%. According to a report by Bao Viet Securities JSC, the average annual rates went down to 4.35%, 4.4% and 4.5% for overnight, one-week and two-week tenors, respectively.

Hieu stated that SBV had asked the State Treasury to withdraw the State capital from commercial banks, especially State-owned banks, causing a shortage of capital on the interbank market.

Besides this, SBV had sold a small amount of foreign currencies and withdrawn an equivalent amount in Vietnamese dong, leading to a decline in the liquidity of the banking system.

Share with your friends:         
 
Business
World
Sport
Travel
 
Publication Permit No. 321/GP-BTTT issued on October 26, 2007
Deputy Editor-in-Chief: Pham Huu Chuong
Managing Editor: Nguyen Van Thang.
Assistant Managing Editor: Pham Dinh Dung.
Head Office: 35 Nam Ky Khoi Nghia St., Dist.1, Ho Chi Minh City, Vietnam. Tel: (84.28) 3829 5936; Fax: (84.28) 3829 4294.
All rights reserved.