Vietnamese banks deposit rates rise as usual at year end
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Banks usually hike deposit interest rates and even offer promotions at the year end, and this year has been no different. On December 19 Sacombank announced a rise in interest rates on deposits of three months from 5.2-5.3 percent to 5.5 percent, and on deposits of 12 months from 6.9 percent to 7.7 percent. VPBank has increased its rates by 0.1-0.7 percentage points, with deposits of 18 months and more carrying the highest rate of 7.8 percent.
State-owned banks such as BIDV and Vietinbank have hiked rates by 0.1 to 0.5 percentage points.
The management of a joint-stock bank headquartered in the south said lending usually rises in the last quarter of the year to meet the rising demand for short-term credit to serve the working capital needs of companies.
As a result, many banks increase their deposit rates, especially for short terms, it said.
Besides, experts said lenders are running out of time to use 45 percent of short-term capital for medium- and long-term loans, with the ratio to be reduced to 40 percent on January 1.
The National Financial Supervisory Commission has recently estimated that credit growth to have slowed significantly to 15 percent this year from 18 percent in 2017.
Questions & Answers
Q.Which banks have increased their interest rates this year?
Which banks have increased their interest rates this year?
Sacombank, VPBank, BIDV, and Vietinbank have all increased their deposit interest rates. Sacombank raised rates on three and twelve-month deposits, while VPBank increased rates across various terms, with eighteen-month deposits seeing the highest rise. State-owned banks BIDV and Vietinbank also hiked rates.
Q.What is the new highest deposit rate mentioned in the article and for what term?
What is the new highest deposit rate mentioned in the article and for what term?
The highest deposit rate mentioned is 7.8 percent, offered by VPBank for deposits of 18 months and more. Sacombank's 12-month deposit rate is 7.7 percent, while other banks show increases between 0.1 and 0.7 percentage points on their various offerings.
Q.Why are banks increasing deposit rates at the end of the year?
Why are banks increasing deposit rates at the end of the year?
Banks typically raise deposit rates to meet rising demand for short-term credit from companies needing working capital in the last quarter. Also, lenders are trying to adjust their short-term capital for medium and long-term loans, as the regulatory ratio is decreasing from January 1.
Q.How has credit growth in Vietnam changed compared to the previous year?
How has credit growth in Vietnam changed compared to the previous year?
The National Financial Supervisory Commission estimated that credit growth has slowed significantly this year. It is projected to be 15 percent, a decrease from the 18 percent growth recorded in 2017. This indicates a notable deceleration in lending activity.
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