Not en masse to cut down the interest rates as large banks that have the
advantage of capital availability are doing, smaller banks which
heavily depend on funds raised from the residents and institutions (M1)
are actually encountering difficulties in raising funds to balance the
capital sources to lower loan interest rates.
This explains why, large commercial banks as BIDV, Vietinbank,
Vietcombank, or Agribank reduced loan interest rates to 12 - 13.5
percent for the preferential group of agricultural sector, export and
SMEs and also production-business loan interest rate to 13 - 14.5
percent per year, there have been very few joint-stock commercial banks
that have reduced loan interest rates for this group. Four banks,
including of Habubank, Maritime Bank, Sacombank and Asia Commercial Bank
are considered the pioneer banks this month bringing their maximum
interest rate down to 15.8 percent per year.
Most recently, the lending interest rate for serving business activities
at some commercial joint stock banks has fallen to 14.4 - 15.5 percent
per year. Notably, just a handful of banks have applied the new interest
rate of 12.89 percent per year for export and import loans, but with
limited amounts.
In the recent few days, the sign of the reduction in dong loan interest
rates that has continued to receive the more positive responses from
Techcombank, VIB and Lien Viet Bank. In addition to lower loan interest
rates for the group of agricultural and rural customer to 12 percent per
year with a total credit in 2010 amounting to about 1.2 trillion dong,
LienVietBank also made decrease by 0.25 to 0.3 percent per year for all
terms of loans. Although only applying to the groups of preferential
customers, this move by this bank has brought the dong loan rate for
terms of less than 6 months to 12 - 12.5 percent and the lowest of 13.2
percent per year for medium and long-term loans.
Difficulty forever
In a bid to reduce loan interest rates, only when commercial banks will
have low-cost capital sources, would they balance the costs and profits
at a necessary level. Even, with Vietinbank, the low-cost money lending
to the agriculture - rural sector must be balanced from various
resources when the cost of preferential loans can possibly secure to
cover all costs and earn a profit.
Pham Huy Hung, chair of Vietinbank also revealed that Vietinbank is
ready for cheap capital of 60 trillion dong to meet the capital needs of
agriculture - rural areas and exports.
Recently, the State Bank of Vietnam has opened bidding sessions of
valuable papers with low interest rate of 7 - 7.5 percent per year. In
the six latest sessions of bidding valuable papers from July 19, 21 and
22, the total volume of short-term (7-14 day) valuable papers reached
nearly 35 trillion dong. A notable figure is that through the open
market operations, in the first days of July, SBV pumped net 5.1
trillion dong into this market.
However, it is said that very few banks, especially small joint-stock
commercial banks have had access to this capital. While on the
inter-bank market, despite the plentiful supply of capital with low
interest rates, banks still have to carefully consider each loan because
as stipulated by the SBV, banks are only allowed to 20 percent capital
raised from this market.