In November, 16 commercial banks raised their savings interest rates by 0.1 percent to 0.7 percent annually, with notable adjustments from Agribank, Techcombank, and MB. In the first half of December, an additional 10 banks followed suit, increasing their rates by 0.1 percent to 0.25 percent compared to the previous month.
As a result, the highest 12-month deposit interest rate available in the market has now reached 6.4 percent per year.
Nevertheless, banking and finance experts indicate that, given the State Bank of Vietnam's (SBV) directive for credit institutions to maintain stable and reasonable deposit interest rates that align with capital balance and healthy credit expansion, a significant trend of interest rate hikes is unlikely to occur.
On the other hand, the implementation of the State Bank of Vietnam’s Circular 48/2024 which regulates the application of interest rates on Vietnamese dong deposits, commencing on November 20, 2024. This circular expressly prohibits credit institutions from conducting any promotional activities related to deposit acceptance and necessitates the public disclosure of all applicable interest rates. This transparency measure is expected to contribute to the stabilization of interest rates.
Faced with the increase in savings interest rates, many businesses fretted that that lending interest rates will also increase.
Many banks have refrained from discussing the possibility of raising lending interest rates, aiming to support economic growth and meet the heightened production and consumer demands during Tet. A leader from a commercial bank in Ho Chi Minh City noted that while input interest rates rose in the final months of the year, lending rates remained unchanged, resulting in a significant decline in the bank's net interest margin (NIM) during the third quarter.
Financial reports for the third quarter of 2024 from listed commercial banks indicated a decrease in industry profits compared to the previous quarter, primarily due to a nearly 0.2 percent contraction in NIM. Despite recent increases in deposit interest rates, lending rates have remained stable.
According to MBS Securities Company, 12 of the 24 listed commercial banks experienced a decline in Net Interest Margin (NIM) during the first nine months of the year. This decrease is primarily attributed to a reduction in the cost of capital, the maturity of high-interest deposits acquired earlier in 2023, and a general downward trend in lending interest rates.
HDBank Deputy General Director Tran Hoai Nam said that although deposit interest rates have increased slightly, the general level is still at a very low level.
The ongoing trend of interest rate reductions by the US Federal Reserve (FED) has led to an influx of foreign capital into banks, which in turn helps to stabilize their capital costs. In addition, to enable a decrease in lending interest rates that would benefit both businesses and individuals, Agribank's leadership has indicated that the bank is actively pursuing a variety of cost-saving measures.
An Agribank leader said that since the beginning of the year, Agribank has reduced lending interest rates 4 times from 1 percent - 2.5 percent per year, a much higher reduction than the reduction in deposit interest rates.
As of November 30, Agribank's average lending interest rate has decreased by about 1.5 percent per year compared to the beginning of the year, a deeper reduction than the average reduction rate of the entire banking system at 0.96 percent per year.
Currently, Agribank's lending interest rate is from 5 percent per year for short-term and from 7 percent a year for medium and long-term.
Deputy Director Nguyen Duc Lenh of the State Bank of Vietnam's Ho Chi Minh City branch reported that credit in Ho Chi Minh City grew by 12.5 percent in the first 11 months compared to the same period last year. This growth is anticipated to maintain a double-digit trajectory through the end of 2025 as planned.
Mr. Lenh highlighted that, alongside year-end and Tet-related capital demands for production, business, and shopping, low lending interest rates are driving businesses and households to access loans. These favorable conditions also motivate credit institutions to accelerate the disbursement of preferential credit packages.
