Banks see increase in outstanding loans
After a decline in the first month of the year, the total outstanding loans of commercial banks in February surged 0.71 percent against December last year, according to the State Bank of Vietnam.
However, the bank reported that loans slid 0.28 percent from late 2012, attributing the decrease to a decline in foreign currency-denominated loans as targeted by the central bank.
The Government’s measures to resolve difficulties for business and production through reaming out the credit flow took effect in February, causing the surge, according to the SBV.
Liquidity of credit institutions was good, helping lending interest rates in the inter-bank market inch down against the beginning of the year. They stayed at 2.7-3 percent for overnight loans, 3-3.5 percent for one-week loans and 4.5-5 percent for one-year loans.
Lending interest rates for production and business were also more stable than at the end of 2012. The rate for agricultural and rural areas, exports, small-and-medium-sized firms, supporting industry and high-tech application firms stood at 9-12 percent yearly. The rates for short-term loans given to other industries averaged 11-15 percent yearly.
SBV said that it would impose credit growth limits on credit institutions so that the entire banking system could meet the credit growth target of 12 percent this year.
By the end of February, deposits also surged two percent against the end of 2012.
Deposit interest rates also remained stable at one to two percent for non-term deposits, 7.8-8 percent for deposits of less than one year and 10-11 percent for deposits of more than one year.
Thanks to the improved liquidity, many banks cut deposit interest rates and kept the rate lower than the 8 percent cap regulated by the central bank. The central bank places an 8 percent interest rate cap on under 12-month deposits; bank previously would offer the cap to attract depositors.
The Joint Stock Commercial Bank for Foreign Trade of Vietnam (VCB) was the latest bank to unexpectedly announce it would cut interest rates for some deposits. VCB decided to trim interest rates for one-to-three-month-deposits to 7.5 percent per annum from the earlier cap at 8 percent. The lender also paid 9.5 percent to depositors of over 12-month terms, down one percent from earlier.
The Asia Commercial Bank (ACB) announced earlier that it would offer only 7.7-7.8 percent per year for deposits of less than 12 months while Saigon Commercial Bank (SCB) offered a similar rate of 7.92 percent for deposits of less than 11 months.