Many banks reduce lending rates

SGGPO 05/18/2023 18:16

Responding to the State Bank of Vietnam's (SBV) call for lowering lending interest rates to support stable economic growth, many commercial banks have announced reductions in lending interest rates as well as launched many interest rate support packages to stimulate credit demand.

Agribank has just announced a further reduction of 0.5%/year in lending interest rates.

On May 18, Sacombank launched a preferential loan package of VND 15,000 billion for personal and business production for individual customers, applicable until December 31, 2023. Accordingly, customers can borrow for short-term business production purposes (including agricultural production) with low interest rates from only 8%/year. For the purpose of borrowing for personal purposes (buying, repairing houses, land, consumption), the interest rate will be from 9.5%/year. At the same time, this bank is also implementing a preferential loan package for individual customers who want to buy cars with interest rates from only 8.5%/year, applicable until June 30, 2023. Accordingly, people can borrow up to 100% of the car's value and the loan period lasts up to 10 years.

On May 17, Agribank also announced a further reduction of 0.5%/year in lending interest rates for existing medium and long-term loans of customers, applicable from now until September 30, 2023. Accordingly, it is estimated that about 2 million customers will be supported with a total amount reduced under the program of more than VND 1,000 billion. For short-term loans, Agribank is also implementing a preferential credit program with the lowest interest rate from 4.5%/year.

Previously, Vietcombank also extended the VND loan interest rate reduction program to 0.5% for all loans of individual and corporate customers until July 31, 2023. Accordingly, it is estimated that more than VND 600,000 billion of Vietcombank's outstanding loans with about 110,000 customers will have their loan interest rates further reduced during this period.

More and more commercial banks are lowering deposit interest rates, while lending interest rates are decreasing more slowly. Explaining why lending interest rates are still "anchored" at a high level, the State Bank of Vietnam said that Vietnam's economy depends heavily on bank credit sources, while the demand for capital for economic development is always high, which has put pressure on lending interest rates. At the same time, the world interest rate level remains high and major central banks in the world continue to implement a roadmap to tighten monetary policy, maintaining interest rates at high levels.

According to the State Bank of Vietnam, Vietnam has a large economic openness, fluctuations in the world financial and monetary markets have had a rapid and strong impact on domestic interest rates and exchange rates, also increasing pressure on interest rates.

Along with that, according to current regulations, the consideration and decision on lending interest rates is agreed upon by banks and customers according to market capital supply and demand and customers' creditworthiness.

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