While the working capital of banks is in surplus, many banks continued enhancing the securities mortgage and repo services.
Banks' deposit rates fell deeper after SBV adjusted down the basic rate to 11% per annum. The lending rate of banks for securities investors was also less than the allowable ceiling level.
To attract investors, both old and new securities companies have associated with banks to boost the services. Typically, BETA Securities Co (BSI) has cooperated with NamA Bank to provide 100 billion dong in loans via the repo service for the shares of informal stock market. The share list subject to BSI's repo include shares of commercial banks, rubber companies, pharmaceutical firms, real estate traders, construction firms, insurers with the lending rate of 16.5% per annum or 1.375% a month applied on three-month loans.
Similarly, SBS brokerage also announced that its securities backed lending rate is 16.5% per year, higher than other kinds of credit. However, the current lending rate was reduced 4.5% per annum sharply against the old rates.
According to the chair of Au Viet Securities Co (AVSC) Doan Duc Vinh, the lending rate of securities repo in association with Agribank has now dropped considerably.
Other brokers namely Nam An, Au Lac and SJC in conjunction with Eximbank also lowered the lending rate based on the basic rate. Eximbank announced an offer of the minimum lending limit of 50 million dong to each investor after carefully appraising their applications.
Yet, as for investors, borrowing loans for securities business is difficult because the profitability of stock investment is very low, especially when the stock market could step into another correction period with high potential risks. One investor stressed that the lending rate is higher than the earnings from securities business.
Meanwhile, there is not much capital disbursement by the banks in the field of stock market despite reduction of lending rates compared to the first ten months.
SBS brokerage reported that after nearly three months of launching securities mortgage and repo service, it has disbursed about 20% of the total amount of 300 billion dong (provided by the parent bank Sacombank). Investors' demand for mortgage and repo service tends to fall in conjunction with the downturn of share prices.
