Banks adjust up short-term deposit rates ahead of Tet

Sacombank has added 10 to 20 basis points to interest rates for tenors of three to five months, sending them rising to 5.3-5.5% per year, but kept deposit rates for one- and two-month tenors unchanged, at 4.8%. The bank revised up borrowing rates in December last year.   

At LienVietPostBank, the annual interest rates for one-month and three-month deposits have risen by 20 basis points each to 4.4% and 4.8% respectively. Interest rates for other tenors have stayed the same.

Commercial banks which are majority-owned by the State are also taking part in the race to adjust up deposit rates to retain old customers and attract new ones.

For instance, BIDV has revised up short-term deposit rates by 50 to 80 basis points per annum since December 23 last year. The annual interest rate for one-month deposits has gone up from 4% to 4.8%, for two-month deposits from 4.3% to 5% and for three-month deposits from 4.7% to 5.2%.

Deposit rates for tenors of one to three months quoted by VietinBank are the same as BIDV. 

Data of the State Bank of Vietnam (SBV) showed that lenders have sped up the borrowing of Vietnam dong to meet increasing demand of individual and corporate clients for payments before Tet. More banks including the commercial banks majority owned by the State have been racing to hike deposit rates.

Experts said it is hard for banks to adjust down their lending rates in the short term as many of them have revised up mobilization rates in the past months to woo more depositors. 

At the end of last year, the SBV pledged to maintain the stability of the exchange rate between the Vietnam dong and the US dollar while trying to cut medium- to long-term lending rates by 0.3-0.5 of a percentage point in 2016.

SBV governor Nguyen Van Binh said at the Government’s web conference on December 29 that credit growth in the banking system should be capped at below 20% this year to back the nation’s gross domestic product (GDP) growth target of around 6.7%.