Vietnam Bank News

Vietnam Bank Directory

Trade LTCUSD, Bitcoin and Cryptocurrencies

BUY & SELL LTCUSD | View LTCUSD News & Updates

Buy Sell LTCUSD, Bitcoin and Cryptocurrencies

Banking News & Financial Services News
Get the latest banking news headlines from Find in-depth Vietnam coverage from banking, investing, financial, stock market, and more abou Vietnam banking system, bank for industry and trade, Vietnam banking sector.

Vietnam banks have hard time attracting deposits   2009-11-16 - Thanh Nien

A teller counts US dollar notes at a branch of Vietcombank in Ho Chi Minh City  
Local lenders are finding their high interest rates unable to attract deposits as investors divert funds to the more profitable stock and real estate markets.


The central bank said in a weekly review late last week that many lenders had increased rates by 0.03-0.3 percentage points on dong deposits and by 0.1-0.3 percentage points on dollar deposits.

Some banks in Vietnam are offering 10.3 percent a year on deposits, nearing the 10.5 percent rate cap. Still, bankers say its been difficult to attract and retain depositors.

A senior official at Vietnam Joint Stock Commercial Bank for Industry and Trade, or Vietinbank, said local lenders had already raised their interest rates to the highest levesl possible.

“Right now lending and deposit rates at our bank are the same. How can we increase deposit rates any further?”

Deposits at Vietinbank barely expanded last month. Meanwhile, Vietcombank said savings from individual customers had declined since the end of October.

Phan Dao Vu, general director of Bao Viet Bank, said that other investment options must be pulling money away from banks as deposit rates at all commercial lenders were similarly high.

Duong Thu Huong, general secretary of the Vietnam Banks Association, said that real interest rates at commercial banks were high, discounting inflation, but they were still less attractive than the profits that real estate and stocks can generate.

A deputy director at a bank in Ho Chi Minh City, who wanted to be unnamed, told Thanh Nien that the highest deposit rates were now at 10 percent a year while other investment options like stocks, gold or property could promise the same income in just a few days.

Trading volume on the stock market used to be around VND1 trillion, but the figure has increased to as high as VND9 trillion recently. The money that went into the market was definitely withdrawn from bank deposits, said the director.

State Bank Governor Nguyen Van Giau was quoted by the Vietnam Economic Times Monday as saying there was pressure on local lenders to generate more funds for the government’s loan subsidy program.

“Under the program, local banks are not allowed to reject loans to businesses as long as they are eligible for the interest rates subsidies,” Giau said.

The situation is now difficult for both lenders and the central bank, the governor said.

The dilemma is that interest rates need to be kept unchanged or be lowered to boost the economy, but at the same time rates should be raised to help lenders attract more funds, he said.

The central bank has said it would maintain its benchmark interest rate at 7 percent until early 2010.

Under a loan subsidy scheme planned for next year, the government will continue to cover 2 percentage points of the interest rates on new loans to eligible businesses, down from 4 percentage points this year.

Other Banking News

Online banking growing in Vietnam   2009-10-27

HSBC Insurance increases stake in Bao Viet Holdings   2009-10-25

Banks still trying to lure more capital   2009-10-21

Citigroup opens Vietnam retail bank as wealth expands   2009-10-13

BIDV sells bonds worth $75.67 mln   2009-08-28

Vietnam to keep key rates unchanged in September   2009-08-26

Banks tightening credit, but loaning to stock investors exception   2009-08-24

Banks assess the cost of advancing card technology   2009-08-21

HSBC named best consumer internet bank in Vietnam   2009-08-18

Banks moving to list shares on HCM City exchange   2009-08-17

Banks raising long-term US$ deposit interest rates   2009-08-17

Banks almost to finish line   2009-08-11

ACB, Standard Chartered ink mutual support pact   2009-08-09

Deposit interest rates rising again   2009-07-30