Commercial banks have agreed to lower deposit interest rates by about 0.5 percent starting from March 6, while State-owned banks will only reduce their rates by 0.2 percent because they are already at the lowest level in the market.
Currently, 16 commercial banks have guaranteed to reduce the interest rate for loans from 0.5 percent point to three percent per year with a total amount of around VND3,500 billion (US$148 million) to support enterprises.
Under pressure to increase the capital of commercial banks to continue restructuring attached with bad debt settlement to energize the economic recovery, the regulation that ownership ratio of foreign investors (foreign room) cannot exceed 30 percent of the charter capital of a commercial bank has been reducing the opportunity to access foreign capital.
Four State-owned commercial banks continue to commit to sparing a support package of VND4 trillion to cut interest rates and all banking service fees for customers in localities implementing social distancing under Directive No.16/CT-TTg of the Prime Minister.
Profit reports in the first quarter of this year of commercial banks have revealed the huge profits of lenders. This is also one of the reasons why banking stocks strengthened strongly recently, contributing to supporting the VN-Index to set a new high in history.
According to the State Bank of Vietnam (SBV), by September 16, credit growth of the banking industry reached 4.81 percent. Although the State Bank of Vietnam has recently raised the credit growth limit for some effective credit institutions capable of expanding healthy credit into sectors serving economic growth, general credit in the banking system is still growing sluggishly.
Recently released financial statements of the third quarter of this year of commercial banks showed that banking industry has continued to flourish with extremely positive profit growth, in which a large part was contributed by revenue from services.