Banks unexpectedly en mass lower saving rate to nearly 5pct/yr

13-Jun-2014 Intellasia | Infonet | 6:00 AM Print This Post

The deposit rate benchmark is being adjusted down by banks. The lowest rate for one-month term deposit in dong at a giant bank is now only 5.1 percent per year.

On June 9, the saving rate benchmark quoted at Vietnam Commercial Joint Stock Bank for Foreign Trade (Vietcombank-VCB) was unexpectedly adjusted down by 0.1-0.3 percent per year for some short saving terms.

Particularly, the one-month term saving rate for individuals at 5.3 percent per year previously has been lowered to 5.1 percent per year, down 0.2 percent per year. The three-month term also fell slightly 0.1 percent per year, from 5.7 percent per year to 5.6 percent per year. Six-month term dropped from 6 percent per year to 5.9 percent per year. Only 12-month term remained unchanged at 7 percent per year.

According to a survey launched by the local Newswire Infonet, the interest rate benchmark of some other large banks such as Eximbank, Bidv and Techcombank still remained unchanged. For example, Eximbank’s interest rate benchmark has been being applied since May 26 with 1-3 month terms at 5.7 percent per year, six months at 6.5 percent, 7-9 months at 6.7 percent and 12 months at 7.3 percent per year.

Since the dong saving rate cut on April 8 so far, Techcombank has adjusted the interest rate benchmark for two times on May 14 and 27 but the rate for short terms was kept unchanged. Currently, the bank offers one-month term saving rate for individuals at 5.6 percent per year, three months at 5.94 percent, six months at 6.24 percent and 12 months at 7.12 percent per year.

Vietcombank’s dong saving rate cut on June 9 may kick off the further downward trend of interest rates of the whole banking system in the time to come. In previous interest rate cut in the money market, Vietcombank had been always the pioneer.

The recent evolutions in the monetary market have made bankers forecast it is likely the interest rates will fall further soon because banks’ liquidity is in surplus while banks are difficult to lend, which force banks to calculate to reduce the input costs.

According to the statistics from the State Bank of Vietnam (SBV), till the end of April, credit growth of the entire banking system was merely 0.62 percent compared to the end of 2013. The total money supply increased 3.9 percent against the end of 2013 and the total deposits grew 3.09 percent from the end of 2013.

Meanwhile, the statistics on banking transactions from May 26 to 30 showed the average interest rate in the interbank market tended to fall. In particular, the average rate for the overnight term in week was at 2.16 percent per annum, down 1.26 percent p.a. compared to the previous week (from May 19 to 23), less than six month terms at 2.7-4.82 percent p.a., down 0.11-1.02 percent p.a.

The further fall of saving rates at banks also coincided with the central bank’s governor Nguyen Van Binh’s message given in early this year that if conditions allow, the interest rates will further fall by 1-2 percent in 2014.


Category: Finance

Print This Post

Comments are closed.