Vietcombank, for example, has cut lending interest rates and fees for clients from Bac Giang and Bac Ninh provinces, the two Covid epicenters, from June 1 to August 31, 2021.

The bank has slashed interest rates by 1 percent on VND loans and 0.5 percent on foreign currency loans. These are applied to all outstanding loans and new loans to people and businesses in the two provinces.

It also reduced by 50% bank fees for businesses and exempted basic fees for individual clients.

In early April, Vietcombank launched a series of preferential loans targeting individual clients, funding their purchases of cars and houses, and the demand for working capital of SMEs.

The loans have the interest rate of 6.79 percent per annum for the first six months, or 7.29 percent for the first 12 months.

Individual clients who receive their salaries via Vietcombank can borrow money from the bank at a rate 0.1 percent lower than normal interest rates.

BIDV launched a new 2021 medium- and long-term credit package, worth VND50 trillion on May 25. The lending interest rates of the package are 0.6 percent lower than earlier this year and 1 percent lower than the same period last year.

BIDV previously launched a VND10 trillion credit package with interest rates of 3.8-5.5 percent (3-month loan), 4-6 percent (3-6 month loans) and 4.5-6.5 percent per annum (6-9 month loans), applied from February 24 to September 30, targeting SMEs.

VietinBank has announced the extension of its preferential lending program until June 30, 2021.

BacABank last month launched a ‘super preferential loan package’ for business clients, worth VND3 trillion.

The interest rate is 7.5 percent for clients with debt acknowledgment contracts of less than six months and 7.7 percent for six months.The program on exemption account service fee has been extended until the end of June 30, applied to the first three months. Clients will enjoy a preferential service fee for the next three months.

MSB in May also launched a program on lending to import/export clients with the interest rates of 6 percent per annum for Vietnamese dong and 3 percent for US dollar loans.

In April, ABBank ran three preferential packages with the credit limit of VND1 trillion with interest rates from 4.4 percent. Small and medium sized enterprises, and micro enterprises, can borrow money to buy foreign currencies to make payments to foreign partners or other foreign currency loans.

HDBank’s interest rate has fallen to 3 percent per annum, which is reserved for individual clients and micro businesses. The package, worth VND3 billion, offers a grace period of six months.

Vietbank has launched the programs ‘Joining hands with businesses 2021’ and ‘Connecting import/export businesses 2021’ with preferential interest rates of 6.5 percent per annum.

The bank has also promised exemption of fees for businesses that pay debts before they become due, and a 50 percent reduced fee for international payment service.

The State Bank of Vietnam (SBV) has slashed fees for credit institutions, which creates favorable conditions for banks to cut lending interest rates, thus making it easier for people and businesses to access credit, which helps to reduce black credit.

Individual customers can borrow at an interest rate of only 6 percent per annum for the first three months, and 7 percent for the first six months. The total credit limits are VND1 trillion for short-term and VND2 trillion for medium- and long-term packages.

Many other banks, including TP Bank, Sacombank and HDBank, committed to cut interest rates in the 2021 shareholders’ meeting season.

Lending interest rates

The average lending interest rates are now at the lowest levels of many years.
The short-term lending interest rate of state-owned banks’ dong loans is 5-6 percent, while it is 7-8 percent for medium and long-term loans.

The interest rates offered by joint stock banks are a little higher, but they offer specific preferences for different groups of clients.

Though the lending interest rates have decreased sharply, they still could be reduced further, according to experts.

They pointed out that the lending interest rates are decreasing more slowly than deposit interest rates.

SSI reported that the latter fell by 2-2.5 percent in the last year, while the former fell by 1-1.5 percent only.

SSI believes that if the deposit interest rates stay firmly at low levels, banks have every reason to cut lending interest rates further.

Vietcombank Securities also thinks that since deposit interest rates are stable, lending interest rates will continue to decrease.

The State Bank of Vietnam (SBV) has slashed fees for credit institutions, which creates favorable conditions for banks to cut lending interest rates, thus making it easier for people and businesses to access credit, which helps to reduce black credit.

However, some experts warn that if the inflation rate increases, lending interest rates are not likely to decrease considerably. In principle, interest rate policy needs to be commensurate to inflation performance to ensure macroeconomic stability.

The recent interbank interest rate increase has also raised concern that this would lead to a commercial interest rate hike. 

Tuan Dung

Deposit interest rates rising despite pandemic

After many months of staying at low levels, deposit interest rates at banks have increased since late May.

Home loan interest rates fluctuate

Many commercial banks have adjusted their preferential home loan interest rates, ranging from 5.99 percent to 9.5 percent per annum.