Sacrificing financial costs, sharply reducing loan interest rates to share difficulties with customers
In the first months of 2023, the economy faced many difficulties due to the multi-dimensional impact of domestic difficulties after 2 years of the pandemic, in addition to the complicated fluctuations in the world economy. Faced with the common difficulties of the economy, the State Bank has operated a monetary policy firmly, flexibly, proactively, promptly and effectively, contributing to controlling inflation, stabilizing the macro-economy and supporting and prioritizing growth promotion. From March to June 2023, the State Bank has continuously reduced interest rates 4 times with a reduction of 0.5-2.0%/year. Thereby continuing to orientate the reduction of the market's lending interest rate level, increasing the economy's access to capital, contributing to promoting economic growth; at the same time, directing credit institutions to have solutions to save costs and reduce lending interest rates.
On the part of credit institutions, they are also constantly striving to deploy all solutions to support the injection of capital into the economy through preferential loan packages, digitized loan procedures with faster and more convenient methods.
Identifying as a large State-owned commercial bank taking the lead in implementing policies of the Party, State, Government and the State Bank, in the first 6 months of the year, Agribank seriously implemented the direction of the State Bank, deployed many solutions to support the economy to overcome difficulties, strived to do business safely and effectively, and reduced lending interest rates to support people and businesses.
Agribank is the bank that has reduced lending interest rates the most in the banking system, having adjusted interest rates down 7 times. Accordingly, for new loans for production and business activities, the short-term lending interest rate is only from 5%/year, the medium and long-term lending interest rate is only from 8%/year. Up to now, Agribank's lending interest rates have decreased sharply with a decrease of 2% to 4%/year compared to the beginning of the year. With the current lending interest rate, Agribank hopes to share difficulties, support people and businesses to optimize borrowing costs, and promptly supplement capital sources to restructure operations, especially for priority areas.
Although banking activities also face many difficulties due to the impact of the economy, the bank accepts to cut profits, is willing to share difficulties, and accompany people, businesses, and the economy. Leaders said that Agribank has reduced more than 1,000 billion VND in lending interest rates, with 2.2 million customers supported. "Although mobilization costs have increased, the bank has seriously reduced lending interest rates according to the direction of the Government and the State Bank. This affects business results. However, the bank is willing to accept a reduction in profits to support customers to sustain business operations and overcome difficulties soon," Agribank leaders shared.
Synchronously deploy solutions to support businesses and the economy
In addition to interest rate reduction solutions, the bank has also implemented many preferential credit policies and programs for businesses. Specifically, the policy of restructuring debt repayment terms and maintaining debt groups according to Circular 02 has restructured debts for more than 2,000 customers by the end of June; implementing interest rate support from the State budget according to Decree 31, Agribank has supported interest rates for 893 customers; loan turnover is 10,813 billion VND, outstanding debt is 4,973 billion VND, interest rate support amount is 57.4 billion VND.
In addition, to support customers in paying bad debts and debts that have been handled for risks during the recovery period after the Covid-19 pandemic, Agribank does not apply overdue penalty interest, late payment interest, and other fees from the date of overdue debt to the date the customer makes repayment.
Low-interest credit programs are actively implemented by banks on a large scale, with diverse subjects such as the credit program of 100,000 billion VND and 500 million USD for corporate customers with preferential VND loan interest rates from only 5%/year, USD loan interest rates from only 3%/year; 30,000 billion VND is allocated to implement the social housing loan program according to Resolution 33/NQ-CP... Agribank also reduces up to 3% interest rates for customers borrowing capital for the purpose of real estate business with difficulties and outstanding debts from January 31, 2023 to December 31, 2024.
Although the economy in general and the banking sector in particular are facing many difficulties, through reporting and monitoring activities, the Deputy Governor acknowledged and highly appreciated the sense of responsibility and efforts of Agribank to continue affirming the position and role of a State-owned commercial bank in implementing the policies of the Government and the State Bank. Specifically, Agribank has reduced deposit interest rates 14 times, reduced lending interest rates 7 times, and focused on increasing access to capital for customers. Service revenue remains stable; capital circulation in the system is regulated smoothly and quickly, both reducing costs and creating conditions for branches to have timely sources of capital for lending. Another positive point is that the bank's bad debt coverage ratio is over 130% in the context of increasing pressure on risk provisioning, showing that the bank has made great efforts to ensure effective and safe operations.
The business environment in the last months of the year is forecast to be uncertain. In the context of the macro-economic situation expected to face many difficulties, in order to fully complete the 2023 plan, Agribank's leaders said that the entire banking system will focus all resources to overcome difficulties and drastically implement business solutions in the last 6 months of the year. Accordingly, Agribank will continue to closely follow market developments, capital balance, proactively forecast to flexibly manage interest rates, internal capital costs... to ensure balance, capital growth in line with safe and effective credit growth; continue to focus on increasing non-term capital growth, contributing to reducing input costs, ensuring the finances of branches and the entire system.
Regarding credit work, Agribank continues to be proactive and flexible in closely following market developments, focusing on directing credit growth in industries and sectors showing signs of good recovery, maintaining market share, sacrificing financial benefits to increase customer scale, potential sectors such as textiles, footwear, etc. At the same time, Agribank effectively implements existing credit programs and products, applies appropriate interest rates to maintain traditional customers, attract good customers, implement customer policies according to management objects, improve the competitiveness of branches, take advantage of opportunities to increase credit, especially in the context of the State Bank quickly adjusting down operating interest rates to support economic growth recovery. One of Agribank's key solutions in the coming period is to focus on building and promptly implementing new credit programs and products that are stable, inheritable, and suitable for each type and production and business needs of people and businesses in each locality to unblock credit capital flows, contributing to promoting effective credit growth.
With the achieved results and efforts, determination, and drastic implementation of solutions, Permanent Deputy Governor Dao Minh Tu believes that Agribank will continue to take the lead, maintain its leading role as a large commercial bank with 100% state capital, and make positive contributions to the banking system in particular and the economy in general./.
PV
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