Banks join hands with enterprises in the coronavirus epidemic peak

	Vietnam taking steps to cope with new coronavirus epidemic
	During Coronavirus epidemic, budget revenue increased by 4.8%
	Banks provide assistance to businesses affected by epidemic outbreak

Many banks have come up with plans to support enterprises affected by the nCoV epidemic.

Reduce interest rates from 1% to 3%

The Governor of the SBV issued a letterdated February 4,instructing credit institutions to proactively grasp the situation of production and business, the extent of damage caused by the nCoV epidemic for their customers who are borrowing capital, especiallyindustries and sectors that may be affected, such as tourism, agriculture and exports, in order to apply supportive measures, remove difficulties for customers such as rescheduling debt payments, considering exemptions and reduction of borrowing interest in accordance with current law.Commercial banks immediately announced plans to support lending interest rates by 1-2% for affected customers.

Vietnam Prosperity Joint Stock Commercial Bank (VPBank) has announced to support lending interest rates by 1.5% per year for unsecured loans and1% per year for securedloans which the customers meet certain conditions such as: belong to sectors and fields affected by the coronavirus, enterprises with major raw material export and import in China; havinggood credit ratingsover several consecutive periods,a stable and transparent financial situation before the epidemic, a history of on-time loan repayment, being traditional customers with continuous credit transactions with VPBank.

According to VPBank, enterprises that will be greatly affected by nCoV includethoseoperating in the field of transport, warehousing; accommodation, tours, restaurants; travel agencies; booking services (especially in tourism provinces such as QuangNinh, Da Nang and NhaTrang);enterprises with mainly Chinese export markets such as agriculture and fisheries;the customers whose main source of raw materials are from China.

According to VPBank's representative,the total number of VPBank's customers affected by this phase is nearly 1,000 enterprises and could be able to increase in the near futureif the epidemic continues.

Previously, AnBinh Commercial Joint Stock Bank (ABBank) saidthey would spend VND4,000 billion to allocate low-cost capital at preferential lending interest rates to support enterprises affected by nCoV. The bank would also proactively consider with each unit in the specific field,offer lower interest rates from 1.5-2% per year compared with normal short-term lending rates and from 3% per year with medium- and long-term loans. In addition,a number of other bankssuch asJoint Stock Commercial Bank for Foreign Trade of Vietnam(Vietcombank), Vietnam Joint Stock Commercial Bank for Industry and Trade (VietinBank),TienPhong Commercial Joint Stock Bank (TPBank)are also in the process of reviewing to make the right policy.

Support enterprises in the field of medicine

Along with support through reducing interest rates, banks also contribute to ensure the supply and stabilize prices of anti-nCoV products.The HCM City Housing Development Commercial Joint Stock Bank (HDBank)said that 100% of the international payment fees would be free for corporate customers operating in the field of supplying pharmaceuticals, equipment and supplies under the international money transfer fee table and trade sponsor for importing pharmaceutical products and medical supplies. In addition, HDBank also reduced 50% of fees for domestic payment account transactions and guarantee issuance fees for enterprises that supply pharmaceuticals, equipment, medical supplies to hospitals/health facilities/medical centers at all levels.

At the same time, HDBank also sponsored enterprises to implement output contracts with hospitals/health departments/health centers;apply the package financing policy (working capitalsupplement,guarantee issuance, L/C issuance)and increase the level of unsecured credit up to VND10 billion;grant limitation of guarantee, loan from 90-200% of the value of assets. An HDBank representative said that this action was to join hands with the community to support enterprises providing conditional pharmaceutical, equipment and medical supplies; ensure the supply of pharmaceutical products and medical supplies to meet the needs of the community.

It can be seen that the above-mentioned support programs will bring a great encouragement to enterprises. Regarding interest rates, according to the State Bank of Vietnam, VND lending interest rate level is commonat 6-9 percentper year for short term; 9-11 percentper year for the medium and long term. Thus, if the above interest rate reduction is applied to damaged enterprises, they will save a lot of costs, thereby compensating for the losses caused by the nCoV epidemic. As for banks, according to experts, the business results for the whole year of 2019 showed that many banks profit had grown very strongly, reaching new records, so this will be an important basis and premise for banks to decide to launch programs to support enterprises without being too afraid to affect profit targets.