“If lending rates can be stabilized, it will be a success.”

Striving to reduce lending interest rates is one of the tasks of the banking industry, set by the Prime Minister at the beginning of the year. However, in the current conditions, experts say that being able to keep interest rates stable is a success…

 

The task of reducing lending interest rates posed to the banking system is increasingly difficult to accomplish (Illustration).

The task of reducing lending interest rates posed to the banking system is increasingly difficult to accomplish (Illustration).

Deposit interest rates continue to increase

As mentioned in the previous article, entering July, the deposit interest rate level continued to have significant changes when a series of commercial banks (commercial banks) sharply increased deposit rates.

In the short term 1-3 months, the interest rate offered was pushed to the ceiling of 4%/year at a series of members such as SCB, NamABank, Kienlongbank, VietABank, etc.

Meanwhile, in the 12-month term, deposit interest rates also increased by 0.2-0.3 percentage points compared to the previous month. The survey shows that there are currently about 20 banks offering interest rates from 6-7%/year for this term. In which, SCB is the bank offering the highest interest rate of 7.3%/year for both over-the-counter and online deposit methods.

Right behind is NamABank with an interest rate of 7.2%/year for online deposit, CBBank is 7.15%/year for over-the-counter deposit…

Notably, with terms over 12 months, long-term interest rates at some members have even been pushed up above 7.5%/year, especially in the group of small and medium sized banks.

In that context, the “big” state-owned banks – which account for the majority of the deposit market share – could not continue to stay out of the “race”.

Agribank recently adjusted to increase deposit interest rates for long terms. Accordingly, in case customers deposit money in terms from 12 months to 24 months, Agribank will add 0.1 percentage point of interest rate for each term up to the same rate of 5.6%/year. This is also the highest interest rate for individual customers this July.

Similarly, BIDV has just announced a new interest rate change in the direction of increasing 0.1 percentage point to 5.6% per year, applicable to deposits from 12 to 36 months.

Difficult to reduce loan interest rates?

As above, after two consecutive years of maintaining a record low, input interest rates have been starting to “heat up” in recent months. With inflation pressure expected to continue to exist in the coming months along with higher credit growth demand during the economic recovery period, deposit interest rates are forecasted to continue to increase in the near future. next time.

This poses a big challenge for banks in deciding output interest rates, especially in the context that the Government has set a task for the whole banking system to strive to continue reducing lending rates. , supporting businesses to recover after the pandemic.

According to Dr. Can Van Luc, Member of the National Monetary and Financial Policy Advisory Council, it is extremely difficult to reduce interest rates this year when input interest rates are increasing while this is also a mainstream trend in other economies. economy in the world.

“This year, if the loan interest rate can be stabilized, it will be a success,” said Dr. Luc said.

According to experts, the banking system may have to accept that the difference in input interest rates increases, output cannot increase. Net interest differential will decrease compared to previous years. Accordingly, banks will be forced to find ways to diversify their operations to increase revenue.

According to analysts at Vietcombank Securities (VCBS), the overall orientation of the State Bank (SBV) is still to keep lending interest rates low in order to support businesses to recover from the epidemic.

However, VCBS believes that, with credit growth expected to be higher than the same period last year, deposit interest rates are under increasing pressure. Accordingly, lending interest rates can hardly avoid certain pressures, but there will be a delay compared to the time of increase of deposit rates. Cùng với đó, sẽ có sự phân hoá giữa mức tăng và thời điểm tăng giữa các ngành nghề.

In the same opinion, experts at VNDirect also said that the State Bank will make efforts to maintain the “appropriate” monetary policy, not tighten the policy immediately to support economic recovery and stabilize the market. Domestic demand is still weak and has not fully recovered to pre-pandemic levels and the SBV still prioritizes the goal of maintaining low lending rates to support businesses and economic recovery.

As for the operating interest rate, VNDirect said that if there is any increase this year, it will likely happen in the fourth quarter of 2022 and the increase (if any) will be limited, about 0.25-0.5 %.

As for the interest rate compensation package, experts believe that this package can help reduce the average loan interest rate by 20-40 basis points by 2022. However, the actual impact of the interest rate compensation package on businesses and the economy may be reduced if commercial banks increase lending rates for other ordinary loans to offset the increase in deposit rates.

 

Business life – BIZLIFE | Tran Thuy | 06-07-2022

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