Banks push "cheap" capital for loans at the end of the year

There were 12 banks that reduced lending interest rates at the end of the year. Photo: Internet

12 banks have reduced interest rates

In a recent announcement, Saigon - Hanoi Commercial Joint Stock Bank (SHB) has announced a program to reduce interest rates from 1.5% to 2%/year for individual and corporate customers in the fields of retail and business such as businesses that are in need of capital to urgently produce essential items. SHB also exempts and reduces early repayment fees, offers preferential service fees, is flexible in loan procedures and documents, and speeds up disbursement.

The International Commercial Joint Stock Bank (VIB) applies a program to reduce interest rates up to 1.5% for customers until June 30, 2023 for both individual customers and small businesses.

Military Commercial Joint Stock Bank (MB) has its own preferential packages, reducing from 0.5-1% per year for priority areas, manufacturing, import and export. MB said, thanks to the promotion of transfer of funds. Digital transformation has helped the bank reduce costs, attract a large number of demand deposits, have low-interest rates, and have conditions to reduce interest rates.

A representative of Shinhan Bank Vietnam Limited said that from August to December 31, corporate customers (including existing customers with loan transactions and new customers) will be reduced from 0.9 to 1.3. percentage points depending on the loan term. For loans in foreign currencies, Shinhan Bank reduced the lending interest rate by 0.6 percentage points for a term of 1-6 months.

In addition, many banks such as An Binh Commercial Joint Stock Bank (ABBank), Asia Commercial Joint Stock Bank (ACB), Ho Chi Minh City Housing Development Commercial Joint Stock Bank (HDBank) also announced to reduce lending interest rates for individual customers and businesses until the end of 2023.

It is notable that with the state-owned banking sector, the Bank for Agriculture and Rural Development (Agribank) announced that for outstanding loans arising from December 1, 2022 to December 31, 2022, Agribank reduces up to 20% compared to the applicable interest rate for each subject and field.

Meanwhile, Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) decided to reduce interest rates by up to 1% per year for loans to existing corporate and individual customers with a credit size of more than VND500,000 billion. The implementation period is until December 31, 2022.

There is no time for capital to flow into speculative channels

Previously, the State Bank of Vietnam (SBV) decided to extend the credit growth limit (room) with an average of 1.5-2% for commercial banks in order to increase resources and the ability to extend credit to support businesses.

According to calculations, the amount of credit in December is expected to be about VND 240,000 billion, mainly focusing on priority areas and manufacturing enterprises.

According to the State Bank, by the end of November, the credit of the whole economy increased by 12.20% compared to the end of 2021, the number with the same period in 2021 increased by 10.8%. In which, by economic sector, credit outstanding for trade and service activities increased the most, reaching 13.6% compared to 10.8% at the end of September and 9.6% of the same period last year.

Similar to the recovery of the service sector after Covid-19. The agriculture, forestry and fishery and production sectors recorded slower growth, at 7.9% and 7.93%, respectively.

Commenting on the "flow" of credit after the move to loosen room and reduce interest rates, many businesses are concerned. However, many experts affirmed that there is no time for capital flows to go into speculative channels because many approved documents are waiting.

Moreover, businesses and banks themselves must be very cautious in year-end disbursement to ensure the safety of the system.

In a recent exchange, SBV Deputy Governor Dao Minh Tu said the SBV will continue to monitor the direction of cash flow using this credit room and is ready to facilitate long-term capital resources for commercial banks, in order to have conditions to have a stable source of capital, to ensure the project needs today.

On this issue, Dr. Nguyen Quoc Hung, General Secretary of the Vietnam Bankers Association, said that in order to continue to stabilize the currency market, banks need to agree to keep the interest rate level stable to ensure the safety of the system and support the lending interest rates to businesses and people as well as supporting each other with resources for smooth system liquidity.

In addition, it is necessary to make adequate provisions for risks and promote communication so that the public can understand and share the banking business.

Besides that, many businesses suggested that banks need to announce the current lending interest rate and the interest rate after the reduction to see the truth clearly.

Moreover, regulatory agencies need synchronous solutions to remove difficulties for the capital market, especially the corporate bond market.