Deposit interest rates fall sharply, lending interest rates drop "drop by drop"

According to a reporter's survey, currently, deposit interest rates have dropped sharply, and very few banks have interest rates above 7%.

Notably, the 4 BIG4 banks simultaneously lowered their 12-month term interest rates to 5.5%/year - the lowest interest rate on the market.

Currently, the banks with the highest interest rates include:

PVcomBank with 12-13 month term deposit product has interest rate up to 11%/year.

However, customers must deposit 2,000 billion VND or more at the counter, applicable to products that receive interest at the end of the term.

In addition, DongABank is also the bank with the highest savings interest rate in the market, up to 8.3% for a 13-month term with deposits of 1 billion VND or more.

Notably, Oceanbank is the only bank that recorded an interest rate increase of 0.1% for 6-month, 12-month and 24-month terms.

According to Mr. Tran Ngoc Bau - CEO of WiGroup Data Company, the mobilization interest rate has decreased to a level that "cannot be reduced any further". This is an interest rate that is consistent with the average inflation rate of Vietnam in 2023-2024, about 3-4%. Therefore, "if the mobilization interest rate continues to decrease more strongly, it is likely to create pressure on capital mobilization because the real interest rate is no longer attractive enough for people".

In addition to reduced deposit interest rates, banks also launched a series of preferential loan packages for people and businesses in both the consumer and production and business sectors.

However, according to reporters, bank lending interest rates have only decreased slightly.

At MBBank , project home loans lend up to 80% of the value of the collateral, with interest rates from 6.8%.

Vietinbank offers loans to small and medium enterprises with interest rates from 6.3%, in the first preferential period.

In fact, some banks have preferential interest rates of 6-8% for borrowers, but after the preferential period ends, the interest rate will float according to the market at the deposit interest rate plus a margin of 3-3.5.

For example, Vietcombank provides real estate loans with loan value up to 70% of the value of the collateral. Loan repayment period is up to 20 years, with interest rate of 8% for the first 2 years, the following years the loan interest rate will be floating equal to the interest rate of 12-month savings deposit plus a margin of 3.5%, but will not be lower than the floor interest rate of 10%.

Mr. Nguyen The Minh - Director of Research and Product Development, Yuanta Vietnam Securities Company - said: "When commercial banks want to reduce lending interest rates, it is no different from banks having to cut part of their profits.

In banks, sources of income such as bond investment or bancassurance accounted for a very high proportion in the past, however, from 2023, these two sources of income at banks have decreased sharply. Therefore, banks only have one source of income, which is interest income from loans.

Besides, Mr. Minh also said that in the context of economic difficulties and increasing bad debt, banks must also increase profits to be able to increase provisioning costs.

According to Associate Professor Dr. Dinh Trong Thinh - economic expert, in the interest rate race, banks hold the initiative, banks are also businesses so they have to make reasonable calculations.

"Currently, deposit interest rates have decreased, but lending interest rates will decrease slowly and cannot decrease as quickly as deposit interest rates," said Mr. Thinh.

Source