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Banks fail to cut loan interest rates

Update: July, 17/2012 - 09:49

HCM CITY — Many banks in HCM City have yet to cut interest rates on existing loans to 15 per cent per year as called for by the State Bank of Viet Nam, Tuoi tre (Youth) newspaper reported.

The State bank earlier this month asked lenders to lower rates to 15 per cent from last Sunday in a bid to assist businesses struggling to secure capital.

A deputy general director of a local major joint stock bank, which held a meeting on the matter yesterday, said it would be very difficult to reduce interest rates for all existing loans as every loan had a different risk level.

"Lending for real estate and securities investment, or short-term or long-term lending, can't be given a similar interest rate," he said.

"Outstanding loans at property firms are huge, amounting to hundreds of billions of dong, so it's impossible to slash rates to 15 per cent immediately."

Another joint stock bank's general director was reported to have said his bank hadn't considered the 15-per-cent rate offer.

"We will offer rate cuts to enterprises based on a balance of interest among all parties; we are sharing difficulties with companies but won't be able to bear too much disadvantages," he said.

Online news VnEconomy estimated banks would see a combined drop of VND16.5 trillion (US$793.27 million) in profits if interest rates for existing loans were cut to 15 per cent.

Last week, several banks already announced rate cuts starting Sunday, including BIDV, Vietinbank, Sai Gon-Ha Noi Bank and Agribank. — VNS

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