Banks continue to reduce savings interest rates, publicize average loan interest rates

Specifically, the Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) has just posted a new savings interest rate schedule, down 0.1%/year for deposits with terms from 1 to 9 months.

The lowest interest rate at Vietcombank is currently 1.6%/year, applicable to customers depositing savings for 1 and 2 months. Similarly, the interest rate for 3-month deposits is 1.9%/year; for 6 to 9 months, it is 2.9%/year.

The highest savings interest rate at the bank remains at 4.7%/year for customers depositing money from 12 - 60 months.

Vietcombank also applies a corresponding reduction to interest rates on deposits of institutional customers. Accordingly, Vietcombank lists interest rates on deposits of institutions at the lowest level of 1.5%/year for terms of 1 and 2 months; the highest is 4.2%/year for terms of 24 months or more.

Thus, the interest rate for individual customers at Vietcombank has decreased to the same level as that applied at the Bank for Agriculture and Rural Development (Agribank).

At the Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV), the listed interest rate ranges from 1.7 - 4.7%/year, and at the Vietnam Joint Stock Commercial Bank for Industry and Trade (VietinBank) from 1.7 - 4.8%/year.

Also from today, April 1, Prosperity and Development Joint Stock Commercial Bank (PGBank) has reduced the interest rate for deposits with terms from 6 to 9 months by 0.2%/year to 3.8%/year. For the remaining terms, PGBank maintains the interest rate at 2.6 - 3%/year for terms from 1 to 3 months and 4.3%/year for terms from 12 months.

The highest interest rate at PGBank is listed at 5.2%/year for customers depositing money for a term of 24 - 36 months.

Previously, in the second half of March, many banks were preparing to increase savings interest rates such as Vietnam Prosperity Joint Stock Commercial Bank (VPBank), Vietnam Export Import Commercial Joint Stock Bank (Eximbank), Saigon - Hanoi Commercial Joint Stock Bank (SHB), Saigon Industrial and Commercial Joint Stock Bank (Saigonbank)... The interest rate increase at these banks is commonly from 0.1 - 0.3%/year depending on the term.

Up to now, the highest listed interest rate in the banking system is 10%/year at Vietnam Public Joint Stock Commercial Bank (PVcomBank), applied to deposits from 2,000 billion VND with a term of 12 - 13 months.

In addition, some banks apply special policies for large deposits, including An Binh Commercial Joint Stock Bank (ABBank), Vietnam Maritime Commercial Joint Stock Bank (MSB)... In which, the highest interest rate at ABBank is 9.65%/year at ABBank, applied to deposits from 1,500 billion VND or more, term of 13 months, interest at the end of the term and must have approval from the General Director and at MSB is 8.5%/year for customers depositing for a term of 12 - 13 months, balance from 500 billion VND.

According to experts, low deposit interest rates continue to create room for banks to reduce lending rates. However, deposit interest rates will be difficult to lower further.

Analysts from SSI Securities Corporation predict that deposit interest rates will hardly continue to be "submerged", possibly increasing by 0.5%/year compared to 2023 to about 5.5%/year by the end of 2024. Meanwhile, lending rates for existing loans are likely to decrease by another 0.5 - 1% in the first half of 2024.

Economist Dr. Nguyen Tri Hieu said that input interest rates may increase again in the second half of 2024 when economic activities improve. However, with a low base interest rate, lending interest rates are still likely to decrease to support businesses, people and the economy in general.

Along with the usual posting of deposit interest rates, banks have officially announced average lending interest rates and the difference between lending interest rates and average deposit interest rates. This move is to implement the Government's and the State Bank's directives on announcing average lending interest rates.

Most recently, VietinBank announced for the first time an average lending interest rate of 6.3%/year, the difference between the lending interest rate and the average deposit interest rate is 2.45%/year.

According to VietinBank, this interest rate difference is used to compensate for legal compliance costs such as risk provision costs, required capital costs for credit risks, operating costs, etc.

Agribank announced the short-term lending interest rate for some priority sectors and fields under the direction of the Government and the State Bank at 4%/year. The normal lending interest rate applied by Agribank is from 5%/year for short-term loans and from 6%/year for medium and long-term loans.

According to the announcement, Agribank's average cost of capital is 6%/year. Of which, the average mobilization interest rate is 4.2%/year, other costs (including compulsory reserves, liquidity reserves, deposit insurance, operating costs) are 1.8%/year. With the above average lending and mobilization interest rates, the current interest rate difference between lending and mobilization is 1.47%/year.

At BIDV, the average lending interest rate is 6.49%/year, the difference between the average lending interest rate and the average capital mobilization interest rate is 3.12%/year.

At Vietnam International Commercial Joint Stock Bank (VIB), the average lending interest rate for individual customers is 7.29%/year for short-term loans and 8.6%/year for medium and long-term loans. For corporate customers, the average interest rate is 6.83%/year for short-term loans and 7.69%/year for medium and long-term loans. The difference between VIB's average deposit and lending interest rates is 3.16%/year.

At Tien Phong Commercial Joint Stock Bank (TPBank), the average lending interest rate is 7.76%/year. Of which, the average lending interest rate for individual customers is 8.85%/year.

At Lien Viet Post Joint Stock Commercial Bank (LPBank), the average lending interest rate in the latest announcement is 8.07%/year. The average interest rate for deposits of all terms is 5.82%/year. The average interest rate difference is at 2.25%/year...

Previously, in Directive 01/CT-NHNN dated January 15, 2024 on organizing the implementation of key tasks of the banking sector in 2024, the State Bank requested credit institutions to proactively publicly announce on the bank's website the average lending interest rate; the difference between average deposit and lending interest rates; lending interest rates for credit programs, preferential credit programs and other types of lending interest rates (if any).

In Official Dispatch No. 1628/NHNN-CSTT recently issued to credit institutions and foreign bank branches regarding the announcement of lending interest rates, the State Bank continues to request credit institutions to send the link of the Interest Rates Announcement Column to the State Bank before April 1, 2024. In case a credit institution changes the link, it must update within 2 working days with the management agency....

The State Bank said that credit institutions have basically announced information on lending interest rates according to the direction of the Prime Minister and the State Bank, but some credit institutions are still in the process of implementing this.

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