HA NOI — Several banks have directed all idle capital toward the Government’s lending programme, causing an increase in short and mid-term deposit interest rates by 0.4 per cent.
Rates have gone as high as 9.99 per cent per annum for a 12-month term, despite the normal lending cap remaining at 10.5 per cent.
Short-term deposits have continued to account for a large portion of commercial banks’ deposit structure, with most deposits for terms of less than six months.
Interest offered on one to nine-month dong deposits at private banks such as SeABank, HDBank, SCB, Techcombank, ACB and Eximbank ranged from 9 to 9.99 per cent, up 2 percentage points against previous rates.
State-owned banks Agribank and Bank for Investment and Development of Viet Nam or partly equitised banks like Vietcombank or Vietinbank also joined the race by raising deposit rates for short term deposits by 0.2-0.4 per cent.
"The stimulus package is going to end and enterprises are trying to mobilise capital to pay loans, while the direction of idle capital towards banks becoming more limited. Banks have to do something to attract depositors and keep them," said Nguyen Thanh Toai, ACB’s deputy general director, adding that even though banks try hard, deposits were still small and slow.
Chairman of Vietcombank Nguyen Hoa Binh added that: "Capital borrowing often surges strongly by the end of the year, so banks have to prepare to catch that trend, especially since corporate deposits this year are low."
Questioned about the low profit margins, one Ha Noi bank spokesman said: "To boost the economy and curb inflation, the central bank should keep the lending rate low. Low interest actually affects our deposits but we dare not overlook the challenge."
On the another hand, short deposits at banks were also blamed on the noise in other markets.
"In recent times, the rebound of property and securities markets and gold price fluctuation have been attracting a large amount of capital. Of course deposits at banks will decrease," market watcher Hoai Nam said.
Some bankers believed deposit interest rates could increase again soon. However, the State Bank of Viet Nam stated that if deposit interest rates for individuals at banks passed 10 per cent, it could intervene. — VNS
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