Personal lending is unlikely to get a lift from the central bank’s recent rate cut.
According to an ACB representative, the bank set aside VND7 trillion ($333 million) to loan to individual customers with lower lending rates. Particularly, from March 7, the largest joint stock bank in asset value slashed lending rates by an average 1.5 per cent point per year over existing rates applicable from early 2012.
With 17 per cent allocated credit growth this year, ACB will step up lending to service individuals, trading households and small businesses for production requirements, as well as housing needs from individual customers.
ACB has devised a variety of specific business programmes with bonus interest rates to customers. For instance, the programme earmarked to customers with stable income sources wishing to borrow for house purchases or repairs offers 1 per cent per year interest rate bonus or the programme ‘refunding contributed capital’ to existing customers offers a 1.8 per cent per year bonus rate, said ACB’s deputy director Bui Tan Tai.
“It is hard to boost personal loans since current borrowing costs remain high though they are falling,” said Tai.
In fact, lending rates applicable to individual customers for house purchases by installments currently range between 18.5-20 per cent per year at ACB.
Like ACB, ANZ Vietnam just rolled out a programme with 2 per cent per year supportive interest rate to borrowers with mortgaged houses or to home-buyers handing in loan records from now until May 31, 2012 and getting loans before June 30, 2012.
The support will take place in the first three months for loans with first disbursement of at least VND500 million ($23,800). Individual customers of priority group will benefit from a 17 per cent, per year special lending rate, for house purchases applicable to disbursed amount in the first three months.
ANZ’s lending rate is applicable to sliding loan amounts, with lending terms of up to 20 years and borrowing amount reaching 70 per cent of the mortgaged asset value. The bank also allowed customers to opt for a flexible loan, with one, three or six month interest rates, according to ANZ Vietnam’s retail banking director Duong Duc Hung.
ABBank also offers customers preferential interest rates from now until April 30, 2012.
Accordingly, the bank offers a 1.5 per cent per year lending rate to customers taking on loans during the period. Lending amounts are up to 80 per cent of collateral value and duration of at most 120 months, applicable to individuals and private trading households.
Industry experts, however, forecast personal credit could hardly soar unless interest rates were trimmed in a more aggressive manner. Loans to individual customers now charge around 18-21 per cent per year interest rate at big banks and 20-25 per cent per year at smaller ones.