A number of big banks including the Bank for Investment and Development of Vietnam, the second biggest state-owned bank by assets-and Asia Commercial Joint Stock Bank-the biggest listed bank- are taking the lead in lending rates cuts for businesses and exporters after the State Bank of Vietnam announced details of guidelines for 4 per cent subsidy of interest rates, Vietnamese state media said on February 6.
The BIDV is expected to lend an initial sum of between VND65 trillion and VND68 trillion to local businesses with subsidized interest rates worth VND2.5 trillion to VND2.8 trillion that accounts for 15 per cent of the US$1 billion stimulus package by the government of Vietnam, Chairman of the BIDV Tran Bac Ha told state media on Thursday.
"For those clients sign loan contracts from January 1 this year, the BIDV will start to subsidize 4 per cent of loans interest rates, and the bank will hold training courses for implementation of the SBV's move," he said.
On the same day, the ACB announced a demand-stimulus package worth VND35 trillion (over US$2 billion) to support local companies to maintain production and exports. The ACB cut lending rates to 5.5 per cent per annum for companies-clients and to 6 per cent for individual customers, particularly to 1.2 per cent to 2 per cent/year for exporters-clients.
A considerable number of other commercial banks such as Viet A Bank, Saigon Commercial Joint Stock Bank, Orient Commercial Joint Stock Bank and Eximbank also joined hands in cutting deposits rates and boosting lending to consumers.
Viet A Bank cut lending rates of week-deposits rates to 4.8 per cent from 5 per cent, of two-week deposits to 5.2 per cent from 5.5 per cent, of one-month deposits rates to 7 per cent from 8 per cent, of two-month deposit rates to 7.2 per cent from 8 per cent, six-month deposits to 8.1 per cent from 8.2 per cent.
Saigon Commercial JS Bank cut 0.5 per cent of loans of different terms and slashed rates of dong deposits to 8.1 per cent per annum.
OCB also capped interest rates of 3-month deposits at most of 6.9 per cent/year, US dollar deposits of one-year to 2 per cent/year.
PhD Tran Du Lich, dean of the Ho Chi Minh Economics Institute said that "implementation of the US$1 billion interest rate subsidy package now is the right time and of great importance with aims to help cut costs for local businesses to boost competitiveness.
"If banks and local businesses are to closely coordinate, it will take at least six months for Vietnam's economy to recover," Lich noted.
Meanwhile, Cao Sy Kiem, former governor of the SBV-cum-Chairman of the Vietnam Association for Small and Medium Enterprises said that the demand-stimulus package will take time to help.
"Besides easing pressures to pay bank loans and borrowing costs, local businesses are now facing how to boost sales of products," Kiem cautioned.
Prime Minister Nguyen Tan Dung forecast that Vietnam's economy will pick up in second half this year. (News Feb 6 p5, Youth Feb 6 p15, Saigon Liberation Feb 6 p1)
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