Banks re-ignite interest war

A teller checks money at Vietcombank's headquarters in Ha Noi. Banks are competing with each other to offer low interest loans. — VNA/VNS Photo Tran Viet

HCM CITY — Commercial banks are vying with each other to lend at low interest rates as they scramble to achieve their credit growth targets for the year.

According to State Bank of Viet Nam statistics collated from 20 lenders' reports, several banks have offered to provide loans totally worth VND80 trillion (US$3.84 billion) and $1.1 billion in at 7-14 per cent interest.

Maritime Bank's rates are among the lowest.

In August it officially launched import finance product MFloat with a credit line of VND5 trillion at a fixed interest rate of 7-9 per cent.

The fixed interest rate has to be paid every month while an additional interest rate has to be paid at the time of borrowing or closing a loan.

Vietcombank said it has offered seven credit packages worth a combined VND31.5 trillion and $1 billion at 10-15 per cent for companies in all sectors.

It has also lent at 10-13 per cent for agriculture and rural, export, and support industries.

Agribank has earmarked VND37.68 trillion at a maximum of 13 per cent for short-term loans and 15 per cent for long – and medium-term loans for agricultural and rural companies.

It has also designated VND10 trillion for export activities.

Despite not having plentiful funds like the major banks, small banks too have unveiled credit products targeting customers'needs.

ABBank, for instance, is offering VND1 trillion at 12 per cent or more.

From September, SeABank will offer a preferential credit package worth VND600 billion for businesses in rice farming, processing, and export at 2 per cent below normal short-term rates.

In December, it will offer six-month preferential loans worth VND1 trillion to businesses in the coffee and seafood sectors at 1 per cent below short-term rates.

Ocean Bank has earmarked VND500 billion for three industries – electrical and electronic equipment, telephones; residential services, tourism; and health care.

They will carry a mere 6.8 per cent interest.

Independent economists appreciated the banks' efforts to cut lending interest rates, saying the move harmonised the benefits of both lenders and borrowers.

The banking industry's credit growth rate of nearly 2 per cent in the last eight months has been far lower than in past years. Analysts point to this as one the reasons for the country's sluggish economic growth. — VNS