Banks expect Q4 interest rate hikes
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Most commercial banks expect deposit and lending interest rates to rise in the fourth quarter this year, a survey by the State Bank of Vietnam has found.
The central bank’s survey, which polled 96% of all domestic and foreign lenders in Vietnam between August 25 and September 10, found that over 59% expect rates to go up by an average 0.37% points per annum in the last quarter this year.
Over 66% of lenders anticipate that the average rate increase will be 0.56% points per annum.
In the last four weeks, more than 30 lenders have increased their deposit interest rates by up to 1.9% points.
Some are offering 7.45% per annum for 12-month deposits.
The central bank survey also found that 88.3% of lenders expect positive pre-tax profit growth this year while 6.8% anticipate a decline.
They estimate forecast capital mobilization growth for the year at 10.2%, lower than the credit growth of 14.9%.
The State Bank of Vietnam (SBV) last week used open market operations to pump VND28.1 trillion ($1.18 billion) into the market and sold foreign currencies worth VND35 trillion.
Tight liquidity has caused interest rates on loans to increase sharply. On Tuesday, the overnight interest rate surged to 8-9% per year. It was around 7.5% per year for other terms.
Questions & Answers
Q.Which banks were included in the survey by the State Bank of Vietnam?
Which banks were included in the survey by the State Bank of Vietnam?
The survey polled 96% of all domestic and foreign lenders operating in Vietnam. It was conducted between August 25 and September 10 this year.
Q.What is the expected average increase in interest rates for Q4 this year?
What is the expected average increase in interest rates for Q4 this year?
Over 59% of lenders expect rates to rise by an average of 0.37% points per annum. However, more than 66% anticipate an average increase of 0.56% points per annum.
Q.How did the State Bank of Vietnam respond to tight liquidity in the market?
How did the State Bank of Vietnam respond to tight liquidity in the market?
The State Bank of Vietnam injected VND28.1 trillion ($1.18 billion) into the market using open market operations. It also sold foreign currencies worth VND35 trillion.
Q.What are banks' expectations for pre-tax profit growth this year?
What are banks' expectations for pre-tax profit growth this year?
Most lenders, 88.3%, anticipate positive pre-tax profit growth this year. A smaller proportion, 6.8%, expect a decline in their profits.
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