Which bank has cut interest rates the most?
According to statistics from VietNamNet , the interest rate market among banks in May 2023 recorded 29 banks adjusting their interest rates down. This number was 27 in June and 29 in July.
And even though it's only been the first few days of August, 13 banks have reduced deposit interest rates.
If at the beginning of May the common interest rate was over 8%/year, by the end of June the number of banks maintaining this interest rate could be counted on the fingers.
By July, only CBBank maintained an interest rate above 8%/year (term of 12 months or more), and to date, this interest rate is no longer available at any bank.
According to statistics, NCB is the bank with the largest frequency of interest rate reductions in the past 3 months, with 10 times of interest rate reduction adjustments.
Next are VietA Bank and TPBank.
Meanwhile, the following group including HDBank, OCB, VPBank, and Sacombank all experienced 7 interest rate adjustments.
BacA Bank, Eximbank, NamA Bank, VIB, and MSB all had 6 adjustments.
Banks that have reduced interest rates 5 times in the past 3 months include: GPBank, Saigonbank, VietA Bank, Techcombank, KienLong Bank, BIDV, and VietinBank.
Meanwhile, Vietcombank and Agribank, along with ABBank, BaoVietBank, SCB, and OceanBank, have experienced four interest rate cuts.
Quality or quantity?
However, the “quality” of the reduction in deposit interest rates does not depend on the number of times the bank announces the reduction. Typically, NCB and VietA Bank, although very active in issuing new interest rate schedules, the actual reduction is far less than that of banks that only announced a few times to reduce deposit interest rates.
A specific example is the 6-month term deposit interest rate. The reduction for this term at NCB and VietA Bank is only 1.3%/year after 3 months, equivalent to banks that have only reduced interest rates 3-4 times (LPBank, OceanBank, BaoViet Bank).
Meanwhile, VietinBank, after 5 interest rate cuts, has shown the most substantial reduction, down to 2.2%/year for a 6-month term. This is the bank with the deepest reduction in the system.
BIDV, VPBank, KienLong Bank and NamA Bank are the banks with the deepest total reduction (only after VietinBank) when the 6-month term interest rate decreased by 1.9%/year. This is the group of banks that announced 5-7 times to lower interest rates.
Next are HDBank and OCB (both down 1.8%/year); Vietcombank, MSB, and Agribank (all down 1.7%/year).
| 6-MONTH DEPOSIT INTEREST RATE ON AUGUST 4 (%/year) AND RESULTS AFTER 3 MONTHS | |||
| BANK | INTEREST RATE ON 4/8 (%/year) | NUMBER OF REDUCTIONS | REDUCTION (%/year) |
| CBBANK | 7.4 | 1 | -0.5 |
| VIETA BANK | 7.4 | 5 | -1.1 |
| NCB | 7.1 | 10 | -1.3 |
| VIETBANK | 7.1 | 9 | -1.3 |
| GPBANK | 7.05 | 5 | -1.25 |
| BVBANK | 7.05 | 2 | -0.35 |
| ABBANK | 7 | 4 | -1.5 |
| BAOVIETBANK | 7 | 4 | -1.3 |
| BACA BANK | 7 | 6 | -1.2 |
| PVCOMBANK | 7 | 3 | -0.7 |
| SHB | 7 | 2 | -0.5 |
| SCB | 6.85 | 4 | -0.95 |
| HDBANK | 6.8 | 7 | -1.8 |
| SAIGONBANK | 6.8 | 5 | -1.1 |
| NAMA BANK | 6.7 | 6 | -1.9 |
| OCB | 6.7 | 7 | -1.8 |
| EXIMBANK | 6.7 | 6 | -0.8 |
| OCEANBANK | 6.6 | 4 | -1.3 |
| PG BANK | 6.6 | 3 | -0.7 |
| VIB | 6.5 | 6 | -1.4 |
| TECHCOMBANK | 6.45 | 5 | -0.95 |
| KIENLONGBANK | 6.4 | 5 | -1.9 |
| LPBANK | 6.4 | 3 | -1.3 |
| VPBANK | 6.3 | 7 | -1.9 |
| MSB | 6.3 | 6 | -1.7 |
| ACB | 6.3 | 2 | -0.4 |
| TPBANK | 6.2 | 8 | -1.6 |
| SACOMBANK | 6.1 | 7 | -1.4 |
| MB | 6.1 | 3 | -0.9 |
| SEABANK | 5.7 | 3 | -1.1 |
| BIDV | 5.3 | 5 | -1.9 |
| VIETCOMBANK | 5.1 | 4 | -1.7 |
| AGRIBANK | 5.1 | 4 | -1.7 |
| VIETINBANK | 5 | 5 | -2.2 |
Interest rates for 6-month deposits have decreased by less than 1% after 3 months, mostly at banks with the fewest interest rate adjustments.
However, there are still cases where interest rates are regularly announced to be reduced but in reality they are not reduced much. The reason is that each time the reduction is only from 0.1 to 0.2 percentage points.
For example, Eximbank, despite having adjusted interest rates 6 times in the past 3 months, has only reduced its 6-month deposit interest rate by 0.8% per year.
Therefore, even though there have been many interest rate cuts, it is not certain that the bank has actually reduced the interest rate. However, just a few reductions by this bank are equivalent to the effectiveness of other banks. A typical example of this case is LPBank, although only through 3 interest rate adjustments, the 6-month term interest rate of this bank has decreased by 1.3%/year.
However, the number of adjustments or adjustment range for mobilization interest rates depends on the calculation of each bank, based on capital mobilization needs, bank liquidity, lending interest rates, as well as market developments.
Therefore, each time a bank decides to reduce interest rates, it will certainly not be an easy decision and should be noted.
As Deputy Governor of the State Bank of Vietnam Dao Minh Tu shared: "Never before has monetary policy been as difficult as in the first 6 months of 2023."
According to Mr. Tu, increasing or decreasing interest rates, increasing or decreasing money supply, how to increase and expand credit, harmonizing credit quality and expanded credit sales, limiting bad debt... are all difficult questions.
"It can be said that solving the above problems is an extremely difficult task because there are many conflicting goals," Deputy Governor Dao Minh Tu expressed.
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