Interest rates mobilized through the bond channel of credit institutions tend to increase - Photo: QUANG DINH
Large capital demand, banks increase bond interest rates
A bond report recently published by VPBanks Securities showed that the average bond issuance interest rate from real estate companies recorded a decline from a very high level in April 2024 (reaching 12%) to 10.95% in June this year.
By July 2024, the market recorded a bond lot with a 0% interest rate of Da Nang Information Technology Park Development JSC with a total value of 500 billion VND, term of 30 months. The remaining lots still fluctuated from 9.8% to 12%.
Thus, according to VPBanks' estimates, the average rate will still fluctuate at only 10% in July. In August, the bond lots will still fluctuate at the same interest rate as last month.
In contrast to the downward trend in real estate companies’ profits, VPBanks recorded a slight increase in credit institutions, from an average of 5.7% to 6%. In addition, securities and commercial service bonds also recorded an increase.
Explaining this, Mr. Duong Thien Chi - VPBank Securities analyst - said that the interest rate of real estate bond issuance fluctuates in a downward trend with the expectation that the difficulties of bonds in general and the real estate industry in particular will be resolved.
"On the other hand, interest rates issued by credit institutions will continue to increase slightly in the coming period, due to the demand for medium and long-term capital when credit recovers," Mr. Chi commented.
Statistics also show that the amount of bonds issued recovered in August and still reached a level much higher than in the first 5 months of the year. However, most of them were bonds issued by credit institutions.
Banks dominate bond issuance race
Based on data from financial reports, by the end of the second quarter, the deposit balance of most banks increased lower than the same period in the context of deposit interest rates remaining at very low levels.
Some banks also saw a decrease in deposits compared to the beginning of the year, such as Vietcombank (-1.8%); PVcomBank (-1.44%), VietABank (-0.34%), TPBank (-2.5%), ABBank (-14.52%)...
Analysts believe that the low increase in mobilization is partly due to people's tendency to withdraw money and switch to other investment channels.
Since the beginning of the year, the investment market has witnessed significant price increases from gold, real estate and stocks... Meanwhile, the average mobilization interest rate of 4.8 - 5%/year is slightly higher than the inflation rate.
Data: Financial statements
According to VISRating data, in August 2024, the amount of new bond issuance increased to VND57,700 billion, from VND46,800 billion in the previous July.
Of which, commercial banks issued a total of VND51,300 billion, continuing to account for the majority of new issuances.
VPBanks' report also shows that credit institutions continue to maintain the trend of buying back bonds before maturity, but is showing signs of decline.
In August, credit institutions bought back VND9,000 billion worth of bonds before maturity, down 69% compared to the previous month, with coupon interest rates ranging from 3.8% to 8.1% (terms of 2 to 10 years).
Not only in the primary market, in August 2024, bonds issued by banking and real estate groups accounted for more than 90% of the trading volume in the secondary market, with trading terms mainly ranging from 1 to 3 years.
Source: https://tuoitre.vn/lai-suat-trai-phieu-ngan-hang-tang-lien-tuc-lai-suat-trai-phieu-bat-dong-san-hut-hoi-20240928123743241.htm
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