Banks’ return on earning assets declines
HÀ NỘI — Banks have continued to record a decrease in the ratio of return on earning assets due to the lending interest rate cut to support COVID-19 affected customers.
According to statistics from VNDirect Securities Company (VNDirect), the ratio of listed State-owned banks dropped by 55 basis points in the first three quarters of this year to 5.8 per cent against 6.4 per cent in 2020. The rate for listed private joint-stock banks declined by 47 basis points to 8.3 per cent from 8.7 per cent in 2020.
The State Bank of Việt Nam (SBV) reported banks had cut lending interest rates of more than VNĐ12.2 trillion (US$539 million) to support customers affected by the pandemic.
To promote the rate cut, the SBV has applied an interest rate subsidy package worth VNĐ3 trillion, which means that banks will lend about VNĐ100 trillion at rates of 3-4 per cent per year for firms which have been severely affected by the pandemic.
The Government has so far planned to enlarge the package’s size to VNĐ10-20 trillion, focusing on supporting customers including small- and medium-sized firms; firms participating in national projects; and firms operating in tourism, aviation and transport.
Based on the incentive policies, VNDirect expects the average lending interest rates to decrease by 10-30 basis points in 2021.
Meanwhile, until the beginning of last month, the three-month savings interest rate at commercial banks remained unchanged compared to the end of 2020, while the 12-month rate dropped by 10 percentage points to 5.53 per cent per year compared to the end of 2020. The interbank interest rates have recovered but are still low compared to the time before the pandemic.
VNDirect has forecast lending interest rates will continue to fall but savings interest rates will increase by 30-50 basis points in 2022. It predicted the 12-month savings interest rate in banks will increase to 5.9-6.1 per cent per year in late 2022, but still lower than the 6.8 per cent rate in the period before the pandemic.
According to VNDirect, it will be difficult for savings interest rates to be maintained at the current low levels as the demand for capital mobilisation will increase in the wake of higher credit demand, rising inflation pressure in 2022 and the competition from other attractive investment channels such as real estate and securities.
As for net interest margin (NIM), VNDirect said the improvement of NIM next year may be different among banks, with the best gainers being those having competitive advantages such as high current account savings account (CASA) ratio and low lending to deposit ratio (LDR). — VNS
Related News
SBV asks to issue revised decree on foreign ownership cap at Vietnamese banks
20:30 | 01/04/2023 Finance
Enterprises’ worry is being in the debt group for banks
13:39 | 31/03/2023 Import-Export
Being many "hot" issues at the general meeting of shareholders of banks
09:24 | 30/03/2023 Finance
Lifting the challenge of capital for businesses
14:52 | 19/03/2023 Import-Export
Latest News
Corporate bonds worth 1.1 billion USD issued in March
13:55 | 06/04/2023 Finance
Tax revenue is estimated at VND 426,922 billion in the first quarter
09:56 | 06/04/2023 Finance
Nearly 400 complaints about insurance distribution through banks on Ministry of Finance hotline
14:47 | 04/04/2023 Finance
Central bank starts huge credit package for social housing projects
14:42 | 04/04/2023 Finance
More News
In Q1, State revenue estimated to rise by 1.3%
13:28 | 04/04/2023 Finance
Consider raising the level of penalties to ensure fairness and transparency in the stock market
13:27 | 04/04/2023 Finance
Central bank cuts policy interest rates to spur growth
17:43 | 02/04/2023 Finance
Ensure policies to attract investment when implementing global minimum tax
10:33 | 02/04/2023 Finance
Solutions to attract FDI when implementing the global minimum CIT
11:38 | 01/04/2023 Finance
Effective implementation of tax incentives as driving force for growth in trade turnover between Vietnam and Cuba
13:43 | 31/03/2023 Finance
Bringing the policies on reducing land rent and water surface rent into life
15:41 | 29/03/2023 Finance
The more delayed the investment disbursement is, the more accumulated the capital expenditure will be
10:22 | 29/03/2023 Finance
Ministry of Finance summarizes the 10-year implementation of the Resolution of the 8th meeting of the 11th Central Committee
10:20 | 29/03/2023 Finance
Your care
The system has not recorded your reading habits.
Please Login/Register so that the system can provide articles according to your reading needs.
Corporate bonds worth 1.1 billion USD issued in March
13:55 | 06/04/2023 Finance
Tax revenue is estimated at VND 426,922 billion in the first quarter
09:56 | 06/04/2023 Finance
Nearly 400 complaints about insurance distribution through banks on Ministry of Finance hotline
14:47 | 04/04/2023 Finance
Central bank starts huge credit package for social housing projects
14:42 | 04/04/2023 Finance
In Q1, State revenue estimated to rise by 1.3%
13:28 | 04/04/2023 Finance