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Vietnam banks promote loans with low interest rates by year-end

Given abundant liquidity and low demand for credit, banks are offering attractive loans during the year-end period.

Many banks in Vietnam are offering loans with low interest rates in an attempt to meet their respective year-end credit goals amid a lack of demand for capital during the Covid-19 crisis.

 Banks are trying to meet their year-end credit goals. Photo: Cong Hung. 


To aid enterprises resuming operation in the post-pandemic period and meet growing demand from customers as the final festive period of the year is approaching, BIDV has expanded its short-term loan package to VND100 trillion (US$4.32 billion) from VND70 trillion (US$3 billion).

Customers applying for this package would be entitled for a preferential rate from 5% per annum for loans with maturity under six months and a 5.5% rate for loans from six to 12 months (0.5 percentage points cut applicable to all terms).

Agribank is promoting a preferential credit package worth VND30 trillion (US$1.29 billion) for small and medium enterprises (SMEs), offering annual rates of 4.8% for short-term loans and 7.5% for mid and long-term loans. This lender also provides another credit package of VND5 trillion (US$216.3 million) for FDI enterprises with a lending rate of 4.8% per annum.

VietinBank offers individual customers and micro-sized enterprises chances of winning prizes worth a combined of VND3 billion (US$130,000) by applying for loans of VND50 million (US$2,163) and above. 

In the fifth interest rates cut since the beginning of the year, Vietcombank continued to lower the lending rates by one percentage points for SMEs or individual customers during the three month-period from December 15, 2020 to March 15, 2021. The decision would result in the bank foregoing a profit of VND300 billion (US$13 million), taking the total figure to VND3.7 trillion (US$160 million) in the five rates cuts.

"Never have been in the history that the lending rates being offered by banks are so attractive," Vietcombank's Chairman Nghiem Xuan Thanh said.  

Besides state-run banks, their private peers are also providing similar credit packages for customers and enterprises operating in fields and sectors severely hit by the Covid-19 pandemic, including tourism, aviation, agriculture or trade.

An expert, who wants to be anonymous, suggested banks’ decision to provide easy loans at this period is a logical decision, given the abundant liquidity in the banking system and low demand for credit.

“Banks are looking for loans in sectors that have strong growth potential during this crisis, including retail or consumer goods,” he noted.

Strong rise of credit growth expected by year-end

Over the past two months, credit growth averaged 1.2% per month, nearly double the growth rate recorded in the first nine months of the year.

As of late September, Vietnam’s credit growth stood at 6.09%, but that of  October and November hit 2.37%, higher than the average monthly growth rate in 2019.

Since the beginning of the year, the State Bank of Vietnam (SBV), the country’s central bank, has cut its interest rate  four times to support the economy amid Covid-19 impacts, with the latest made on September 30 by slashing 0.5 percentage points to the refinancing interest rate, discount interest rate, overnight lending rate, and interest via open market operations (OMO). 

The market is expecting the 5th policy rate cut this year from the SBV to ensure the economy reaching its growth target of 2.5-3%. Hanoitimes

Thao Nguyen/Ngoc Mai

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