HÀ NỘI — After two weeks of lowering lending interest rates for short-term đồng loans following the central bank’s cue, several commercial banks have reduced their deposit interest rates.

On Tuesday, Việt Nam Export-Import Commercial Joint Stock Bank (Eximbank) lowered its annual interest rates for under-six-month deposits by 0.1-0.2 percentage points.

Accordingly, the rate for one-month deposits was reduced from 4.7 per cent to 4.6 per cent, two-month deposits from 4.9 per cent to 4.8 per cent, three-month deposits from 5.1 per cent to five per cent and six-month deposits from 5.8 per cent to 5.6 per cent.

Vietnam Prosperity Commercial Joint Stock Bank (VPBank) also adjusted interest rates downwards for deposits of one to three-month terms.

Some other banks were quoted by Người Lao Động (The Labourer) as saying they are following market movement and could change interest rates at any time.

Eximbank general director Lê Văn Quyết admitted that the bank had reduced its lending rates but found it difficult to lend while it still had to pay interest for deposits, thus it had to lower its saving rates to ensure business efficiency.

According to SBV’s HCM City branch, in the first six months of the year, total amount of deposits mobilised by commercial banks in the city reached VNĐ1.8 quadrillion (US$80 billion) while total lending was only VNĐ1.63 quadrillion, proving that commercial banks have abundant liquidity.

Đỗ Minh Toàn, general director of Á Châu Commercial Joint Stock Bank (ACB), said enterprises’ demand for capital in the next three months would likely not go up, adding that the bank has to maintain average short-term deposit interest rate at 4.9 per cent to ensure its interest income.

Declining interest rates is a positive signal for the economy, according to banking expert Nguyễn Trí Hiếu. Only commercial banks which have excess capital have grounds to adjust deposit interest rates downwards.

Earlier, on July 7, SBV issued a decision to cut annual refinancing interest rate, rediscount interest rate and overnight interest rate applied to electronic inter-bank payments, and the rate of loans to offset capital shortage in clearing of payments between SBV and domestic banks by 0.25 percentage points.

The maximum annual short-term interest rate for loans in đồng currency by credit institutions to meet customers’ demand for capital in some prioritised sectors has also been cut by 0.5 percentage points from 7 per cent.

Following the decision, commercial banks started announcing lending rate cuts. However, experts have predicted that banks which have cut the rates might face a further decline in the net interest margin (NIM) if they do not lower deposit interest rates accordingly.

NIM is the ratio of net interest income to invested assets, with net interest income being the difference between interest income and interest expense.

SBV Governor’s requests

On Thursday, in a meeting with credit institutions to hear reports on their business performance, SBV Governor Lê Minh Hưng asked the institutions to save costs and further improve business efficiency to create a foundation for the interest rate reduction.

Commercial banks at localities should enhance co-operation with local authorities to organise programmes linking banks with enterprises so that capital mobilised by the banks would be disbursed.

However, he requested the banks ensure that loans would be poured in production sectors prioritised by the Government and control credit growth in risky fields so that the year’s credit growth target of 18 per cent would be feasible. — VNS