Thailand
Vietnam: Banks lower interest rates to restructure capital sources
The Hanoitimes – Many banks have reduced the interest rate for short-term deposits while raising the rate for long-term deposits to restructure capital sources.
BIDV has applied the new rates from May 22, lowering its annual interest rate for three-month and six-month deposits by 0.2 percentage points. Accordingly, the rates for these months are listed at 4.6 percent and 5.1 percent per year, respectively.
The bank, however, has maintained a high interest rate of 6.9 percent per year for 12-month and 24-month deposits.
The bank, however, has maintained a high interest rate of 6.9 percent per year for 12-month and 24-month deposits.
LienVietPostBank has also lowered the rate for short-term deposits, listing one-month, three-month and sixth-month rates at only 4.4 percent, five per cent and 5.8 percent per year, respectively.
Vietinbank has followed suit, quoting the interest rate for under-three-month deposits at 4.1 percent. The bank’s rate for four-month and five-month deposits is 4.6 percent, while it is 5.1 percent for six-month deposits.
It has kept the interest rate at 5.5 percent for six-month-to11-month deposits, much lower than the 6.8 percent applied to 12-month deposits and seven per cent for 36-month deposits.
Eximbank has also kept a low rate of 4.6 to five percent for deposits under six months since May 21. However, the bank has increased the rate for long-term deposits, of which 12-month deposits will attract an interest rate of 6.8 per cent and 24-month and 36-month deposits will have eight per cent.
Earlier, VPBank applied new rates from March 30, lowering its annual interest rates for under-six-month and 12-36 month deposits by 0.2 percentage points.
The bank’s rates for 6-7 month and 8-11 month deposits were also reduced by 0.3 and 0.4 percentage points, respectively.
VIB also cut the deposit rates twice in March. Accordingly, the rate for 1-3 month deposits was reduced by 0.3-0.5 percentage points to 5-5.1 percent, while rates for deposits with terms of more than 6 months were also slashed by 0.2-0.4 percentage points.
Military Bank also adjusted interest rates downwards for short-term deposits by 0.1-0.2 percentage points against February.According to the National Financial Supervisory Commission (NFSC), the loan-to-deposit ratio of the banking system by the end of March stood at 88.2 percent, higher than the 87.8 percent rate at the end of last year.
In contrast to forecasts late last year that banks’ savings channels will become less attractive as cash flows start to shift to other channels in the context of the stock market continuing to prosper and real estate warming up, the NFSC’s report showed that capital savings remains attractive to many people in the first months of the year.
Capital mobilization of the banking system in the first quarter of this year rose 3 percent against 2.6 percent in Q1 2017, while credit growth slowed down to 3.5 percent against 4.3 percent in Q1 2017, according to the NFSC’s report.
A recent survey of the State Bank of Vietnam’s (SBV’s) Monetary Forecasting and Statistics Department also showed that credit institutions hope the average mobilization growth in Q2 this year will be some 4.71 percent, much higher than Q1, and the annual mobilization growth will reach around 16.65 percent, equivalent to the levels of 2017 and 2016. Notably, credit institutions also expect deposits from six months to one year to account for 83-86 percent of the total mobilization in Q2 and throughout 2018.
However, the NFSC also pointed out another reason for the stable liquidity of the banking system in Q1 this year. This stability was partly due to the increase in foreign capital purchases by the SBV and the slow disbursement of Government bond capital, the government’s financial watchdog said.
Vietinbank has followed suit, quoting the interest rate for under-three-month deposits at 4.1 percent. The bank’s rate for four-month and five-month deposits is 4.6 percent, while it is 5.1 percent for six-month deposits.
It has kept the interest rate at 5.5 percent for six-month-to11-month deposits, much lower than the 6.8 percent applied to 12-month deposits and seven per cent for 36-month deposits.
Eximbank has also kept a low rate of 4.6 to five percent for deposits under six months since May 21. However, the bank has increased the rate for long-term deposits, of which 12-month deposits will attract an interest rate of 6.8 per cent and 24-month and 36-month deposits will have eight per cent.
Earlier, VPBank applied new rates from March 30, lowering its annual interest rates for under-six-month and 12-36 month deposits by 0.2 percentage points.
The bank’s rates for 6-7 month and 8-11 month deposits were also reduced by 0.3 and 0.4 percentage points, respectively.
VIB also cut the deposit rates twice in March. Accordingly, the rate for 1-3 month deposits was reduced by 0.3-0.5 percentage points to 5-5.1 percent, while rates for deposits with terms of more than 6 months were also slashed by 0.2-0.4 percentage points.
Military Bank also adjusted interest rates downwards for short-term deposits by 0.1-0.2 percentage points against February.According to the National Financial Supervisory Commission (NFSC), the loan-to-deposit ratio of the banking system by the end of March stood at 88.2 percent, higher than the 87.8 percent rate at the end of last year.
In contrast to forecasts late last year that banks’ savings channels will become less attractive as cash flows start to shift to other channels in the context of the stock market continuing to prosper and real estate warming up, the NFSC’s report showed that capital savings remains attractive to many people in the first months of the year.
Capital mobilization of the banking system in the first quarter of this year rose 3 percent against 2.6 percent in Q1 2017, while credit growth slowed down to 3.5 percent against 4.3 percent in Q1 2017, according to the NFSC’s report.
A recent survey of the State Bank of Vietnam’s (SBV’s) Monetary Forecasting and Statistics Department also showed that credit institutions hope the average mobilization growth in Q2 this year will be some 4.71 percent, much higher than Q1, and the annual mobilization growth will reach around 16.65 percent, equivalent to the levels of 2017 and 2016. Notably, credit institutions also expect deposits from six months to one year to account for 83-86 percent of the total mobilization in Q2 and throughout 2018.
However, the NFSC also pointed out another reason for the stable liquidity of the banking system in Q1 this year. This stability was partly due to the increase in foreign capital purchases by the SBV and the slow disbursement of Government bond capital, the government’s financial watchdog said.
Source: http://www.hanoitimes.vn/economy/2018/05/81E0C777/banks-lower-interest-rates-to-restructure-capital-sources/