In the context of the Covid-19 epidemic, the slow credit growth has forced banks to lower mobilisation costs to reduce output interest rates. However, idle capital is still flowing into banks.
According to the report of the State Bank of Vietnam (SBV) HCM City branch in July 2020, for dong deposit interest rate, credit institutions (CIs) have cut interest rates in accordance with the direction and operating interest rates of the SBV.
Commercial banks have lowered the rates across the terms by 0.08 0.58 percent per annum, while joint venture banks and foreign banks have cut the rates by about 0.7 two percent per annum, depending on the terms.
The dong deposit interest rates are applied by banks at 4.2 4.25 percent per annum for terms of less than six months, 4.9 7.29 percent per annum for terms from six to less than 12 months, and 6.04 7.55 percent per annum for terms of 12 months or more.
Although the deposit interest rates, along with the pressure of the strong rise of gold price in the recent time, many people thought that some customers would withdraw their savings to invest in gold.
However, according the July report of the SBV HCM City branch, the total capital mobilisation of CIs in the city was estimated at 2,648 trillion dong as of July 31st 2020, up by 0.6 percent compared to the end of the previous month, up by 3.96 percent compared to the end of 2019, and up by 11.06 percent compared to the same period of 2019.
Specifically, the capital mobilisation in dong was estimated to reach 2,315 trillion dong, accounting for 87 percent of the total mobilisation fund, up by 0.58 percent compared to the previous month, and up by 4.51 percent compared to the end of 2019.
The capital mobilisation in foreign currencies was estimated to be 330 trillion dong, accounting for 13 percent of the total mobilisation, up by 0.74 percent compared to the previous month, and up by 0.33 percent compared to the end of 2019.
In terms of deposit forms, payment deposits of economic organisations and individual were estimated at 1,315 trillion dong, accounting for 51 percent of the total mobilisation, up by 0.57 percent compared to the previous month and up by 5.02 percent compared to the end of 2019.
Savings deposits of residential customers were estimated to reach 1,109 trillion dong, accounting for 42 percent of the total mobilisation, up by 0.47 percent compared to the previous month and up by 0.98 percent compared to the end of 2019.
The issuance of valuable papers was expected at 188 trillion dong, accounting for seven percent of the total mobilisation, up by 1.57 percent compared to the previous month, and up by 15.74 percent compared to the end of 2019.
Assessing the situation of capital mobilisation of banks in the area, leader of the SBV HCM City branch said that the mobilisation of capital by the end of June 2020 has generally been more positive compared to the early months of the year (increasing by 3.35 percent compared to the end of the previous year). it is estimated that in the first seven months of 2020, the capital mobilisation continued to rise by 3.96%, but lower than the same period of last year.
This is due to the impact of Covid-19 pandemic on economic sectors in general and banking in particular. Specifically, the group of state-owned banks recorded a credit growth of 1.56 percent and that of joint stock commercial banks was 4.85%.
The dong mobilisation still accounted for the major proportion in total mobilisation with 87%, while mobilisation in foreign currencies only accounted for 13%. In the first half of 2020, the mobilisation in dong grew by 3.91%, in which payment deposits in dong increased strongly by 5.75%.
The foreign currency mobilisation in June 2020 fell by 2.65 percent compared to the previous month. In particular, it mainly declined in payment deposits with a reduction of 3.27 percent compared to the end of the previous month.
Payment deposits continued to account for the largest proportion in total mobilisation with 51%, while savings deposits accounted for 42 percent and issuance of valuable papers only accounted for a small proportion of nearly seven percent. The issuance of valuable papers maintained a fairly good growth rate in the first two quarters of 2020 with 13.96%.
