Many large commercial banks have continued to lower savings rates across the terms.
In the latest interest rate table, Commercial Joint Stock Bank for Foreign Trade of Vietnam (Vietcombank) has cut savings rates for terms of one to two months to only 3.5 percent from 3.7 percent per annum at the beginning of August. This is the lowest interest rate for one-two month terms applied by Commercial Joint Stock Bank for Agriculture and Rural Development of Vietnam (Agribank), Commercial Joint Stock Bank for Investment and Development of Vietnam (BIDV) and Commercial Joint Stock Bank for Industry and Trade of Vietnam (VietinBank) after reducing interest rates.
For other terms, each bank made a different adjustment. For example, Vietcombank has lowered nine-month savings rate by 0.1 percentage point to 4.5 percent per annum. The highest savings rate at the bank is current 6.1 percent per annum for term of 24 months.
At Agribank, the savings rate for terms from nine to 11 months have been lowered to 4.4 percent per annum instead of 4.5 percent per annum at early August.
The savings rates for terms from 12 months or more at Agribank, VietinBank, BIDV and Vietcombank are now popular around six percent per annum.
According to representative of Vietcombank, the bank’s savings and lending rates are determined based on the capital supply and demand, and the direction of the State Bank of Vietnam (SBV), in order to contribute to the monetary policy management.
The trend of reducing savings rates has been applied by banks recently in the context of the low credit growth due to the impact of Covid-19, the poor capital absorption of businesses and the economy and the abundant liquidity of the banking system.
The lowest short-term savings rate at the present time is recorded at Vietnam Technological and Commercial Joint Stock Bank (Techcombank) at 3.15 percent per annum for term of one month, applicable for ordinary customers. At Vietnam Prosperity Commercial Joint Stock Bank (VPBank), customers depositing less than 300 million dong on terms of one to two months are offered a rate of 3.5 percent per annum, equal to the rate at state-owned commercial banks.
Statistics of the SBV showed that as of July 31st, the credit growth of the system of credit institutions (CIs) reached 4.03 percent while the capital mobilisation grew faster at 5.71 percent compared to the end of last year.
As reported by the SBV HCM City branch, the capital mobilisation of CIs in the city as of July 31st increased by 3.96 percent and credit increased by 3.66 percent over the end of last year. In the first half of 2020, the savings rate in dong of private commercial banks dropped by about 0.08 0.58 percent percentage point compared to the end of last year. For lending rates, private joint stock banks lowered the rates for normal production and business sectors by about 0.1 0.33 percentage point, depending on the term, while state-owned banks cut the rate by about 0.11 percentage point for medium and long-term rates, etc.
According to the SBV, the further reduction of savings rates will be the basis for lowering lending rates. Nguoi Lao dong informed that the SBV’s Governor Le Minh Hung in the last week required affiliated units and CIs and foreign bank branches to carry out the tasks in the last six months of 2020.
In particular, CIs are tasked to strictly abide by the instructions of the government, the prime minister and the SBV on reducing operating costs; lower salaries, bonus and profits to further reduce the net lending rates for existing loans and new loans; thereby supporting and accompanying businesses and people to overcome difficulties, contributing to the recovery of production and business after the epidemic.
