Increased pressure from the gap between deposit interest rates and...

Deposits grew more slowly than credit as interest rates fell by 0.4%.

According to information from the Statistics Department of the Ministry of Finance , as of March 25, 2025, total capital mobilization from credit institutions had increased by 1.36%, while credit provided to the economy increased by 2.49%. This resulted in a difference between deposits and loans in the banking system of up to 1.1 trillion VND.

The State Bank of Vietnam (SBV) has just released updated figures on customer deposits at credit institutions as of the end of December 2024. Accordingly, the total amount of capital mobilized from individuals and economic organizations reached VND 14.73 million billion, with banks mobilizing an additional VND 463,000 billion in December alone. Specifically, deposits from individuals reached VND 7.065 million billion (an increase of VND 65,000 billion in December), while deposits from economic organizations reached VND 7.66 million billion (an increase of nearly VND 400,000 billion).

Although deposits in the banking system are close to reaching 15 million billion VND, the growth rate is still slower than credit growth. By the end of 2024, total outstanding credit had reached 15.7 million billion VND, nearly 1 million billion VND higher than total deposits. Entering the first quarter of 2025, this trend is expected to accelerate as credit growth doubles the rate of deposit growth, causing the difference to exceed 1 million billion VND.

Notably, deposits remained at their peak despite a downward trend in deposit interest rates since mid-February, while other investment channels such as real estate, gold, and stocks were gradually improving. Consequently, capital tended to shift more strongly towards these investment areas, making it difficult for deposit growth to keep pace with credit growth.

Since the beginning of April, three more banks –OCB , MB, and VPBank – have adjusted their deposit interest rates downwards. Thus, following directives from the Prime Minister and the State Bank of Vietnam since the end of February 2025, approximately 28 commercial banks have reduced deposit interest rates, with some banks such as Eximbank and Kienlongbank making multiple adjustments (7 times and 4 times respectively). The highest reduction recorded was over 1% per year.

According to estimates from credit institutions, in the first quarter of 2025, the average deposit interest rates in VND across all maturities decreased slightly by 0.03 to 0.05 percentage points; lending interest rates also recorded a decrease of 0.08 to 0.1 percentage points compared to the previous quarter. This development contradicts previous forecasts of a slight increase in both types of interest rates in the previous survey period.

Increased pressure from the gap between capital mobilization and lending. — To compensate for the shortfall, banks have to use their own capital and refinancing from the State Bank.

The shortfall will be covered by both equity capital and refinancing from the State Bank of Vietnam.

Recent events show that rapid credit growth has led to a surge in the banking system's demand for capital mobilization. To maintain their ability to attract deposits, banks are forced to keep deposit interest rates relatively stable. According to forecasts from credit institutions, in the second quarter of 2025, the average deposit interest rate across the entire system will remain basically stable, with an insignificant increase – approximately 0.02 percentage points for terms over 6 months and 0.17 percentage points for terms of 6 months or less throughout 2025.

Nevertheless, banks are still striving to reduce lending interest rates to support production and business activities. It is expected that the average lending interest rate across the entire system will continue to decrease slightly by 0.03 to 0.08 percentage points in the second quarter and throughout 2025.

For the whole year, credit institutions expect total system-wide capital mobilization to grow by approximately 13.10% – 3.3 percentage points lower than the expected credit outstanding growth of 16.4%. Of this, short-term credit and deposits are projected to grow more strongly than longer-term maturities.

At a workshop held at the end of February 2025, Deputy Governor of the State Bank of Vietnam, Dao Minh Tu, frankly acknowledged that the banking sector is currently lending more capital to the economy than it has mobilized. Specifically, for every 9 dong mobilized, the system lends out 10 dong, and the shortfall must be covered by the bank's own capital and refinancing from the State Bank of Vietnam.

This places significant pressure on the banking sector in 2025, when it is tasked with supporting economic growth targets of 8% or higher. While the national GDP is currently around 12 trillion VND, outstanding credit has reached approximately 16 trillion VND – equivalent to 135% of GDP. Mr. Tu commented: "From a macroeconomic perspective, this is a worrying problem, but one that must be addressed with concerted effort, in line with the political determination of the Party, the Government, and all levels and sectors."

Given that deposit growth is not keeping pace with credit growth, the State Bank of Vietnam will proactively use its monetary policy tools to support liquidity in the system, ensuring the availability of credit to serve growth targets.

At the same time, this year's operational direction continues to emphasize prioritizing credit in essential production and business sectors, with a focus on strongly promoting domestic consumer credit.

In addition, the State Bank of Vietnam will also maintain its policy of stabilizing the policy interest rate, thereby creating conditions for commercial banks to have room to further lower lending interest rates, supporting businesses and the economy.

Source: https://baodaknong.vn/gia-tang-ap-luc-tu-khoang-cach-giua-lai-suat-huy-dong-va-cho-vay-248922.html