Loan interest rates will gradually decrease

After the Banking Association called on member banks to reduce deposit and lending interest rates two weeks ago, banks began to eliminate promotions such as giving gifts, giving money as well as reducing interest rates. Mobilization rate dropped to around 11.5%/year. This is a condition for lending interest rates to decrease in the near future.

Mr. Pham Duy Hung, General Director of Viet A Bank, said that if the State Bank continues to support state-owned banks to reduce lending interest rates to 12% - 13%/year, other joint stock banks will reduce them. interest rate, or only select high-risk customers to lend at high interest rates. However, Mr. Hung believes that the trend will lean more towards the first direction because most banks do not want to take risks.

Sharing the same opinion as Mr. Hung, the leader of another bank said that to lower lending interest rates as desired, the State Bank must support joint stock commercial banks through providing cheap capital through market operations. The market opens or lowers required reserves so that banks can reduce input costs and thereby lower output interest rates.

Currently, most banks are mobilizing with interest rates from 11.5% - 11.8%/year, of which many banks have other promotional programs, and the popular lending interest rate is 14 .5% to 15% for joint stock banks and 13.5% - 14.5% for state-owned banks. However, the Government's April regular meeting resolution requested the State Bank of Vietnam to lower lending interest rates to 12%/year in the near future.

Mr. Nguyen Tri Hieu, member of the Board of Directors of An Binh Bank (ABBank), said that interest rates have decreased significantly compared to a few months ago and ABBank as well as other banks hope that the State Bank will take measures. helps lower interest rates further. However, reducing interest rates cannot be done immediately but takes a long time, he said. Mr. Hieu said, "With the desired interest rate of 12%, the inflation index will have to be pushed down to 7%, then add a positive real interest rate margin for depositors of about 2%, and a net profit margin for Bank 3%. So clearly we have to bring the inflation index down to 7%, which is difficult to do at this time."

According to Mr. Hieu, inflation must be around 10% to maintain a growth rate of 6.5%. However, from now until the end of the year, the goal of bringing lending interest rates down to 12% can be achieved on the condition that the bank's liquidity must be further improved, he said.

Currently, ABBank's loyal customers are subject to loan interest rates ranging from 13.5% - 14% and the bank predicts that in the next 1-2 months interest rates will decrease by another 0.5 - 0.75%. . Assessing the Government's target of reducing lending interest rates to 12%, Mr. Tran Hoang Ngan, member of the National Monetary and Financial Policy Advisory Council, said that the target can be achieved but requires long time. "The State Bank is currently gradually extending lending terms through open market operations, while banks that have recently won a large amount of Government bonds will have more opportunities to participate in the open market," he said.

Thus, banks' ability to access cheap capital will increase. (Because when participating in open market activities, to borrow capital at low interest rates from the State Bank of Vietnam, banks need to mortgage valuable papers such as Government bonds).

According to Thuy Trieu TBKTSG