Banks agree to cut lending rates to support hard-hit businesses

Most banks have agreed to cut the lending rate for enterprises hard hit by the COVID-19 pandemic from this month until the end of this year.
Banks agree to cut lending rates to support hard-hit businesses ảnh 1A customer makes transaction at Vietcombank's branch in Hanoi. Banks agree to cut lending rates to support enterprises in the last five months of this year. (Photo: VNA)
Hanoi (VNS/VNA) - Most banks have agreed to cut the lending rate forenterprises hard hit by the COVID-19 pandemic from this month until the end ofthis year.

This consensus was reached during a meeting of 16 banks with the State Bank of Vietnamon July 12.

The COVID-19 pandemic is having a negative impact on Vietnam’s economy and hasforced many enterprises to suspend production or close entirely.

“Techcombank agrees to reduce interest rates to support customers,” said Pham QuangThang, deputy CEO of Techcombank.

Thang said, to date, the bank had spent more than 100 billion VND (4.3 millionUSD) on activities to support the community amid the pandemic under thedirection of the Government and the banking industry.

Since last year, Techcombank had continuously cut lending rates for prioritysectors to below 4.5 percent per annum, for essential economic sectors to about6-7 percent per year. The bank would focus on supporting labour-intensiveenterprises and those essential for the economy.

“As for real estate businesses and exporting businesses which earned bigprofits or individuals who borrow money to buy cars, they should not be thesubject of interest rate support,” Thang said.

Nguyen Viet Manh, a member of Agribank’s board of members, said Agribank alsoagreed to cut interest rates to support businesses. The bank’s leaders wouldmeet to discuss the reduction rate but the average lending rates would decreaseby about 1 percent, some loans could enjoy a drop of 2-2.5 percent.

Meanwhile, deputy general director of Military Bank Pham Thi Trung Ha said thebank would support businesses directly affected by the pandemic, whose revenuesdeclined steeply, such as companies in the fields of tourism, accommodation andservices with an interest rate cut of 1 percent or higher.

"However, MB will base on its customer database to select businesses inmore difficulty, thereby having an appropriate interest rate supportpolicy," Ha said.

Lower profits

Some banks said they would consult shareholders as cutting interest rates wouldaffect their profit plans this year.

A representative of BIDV said a cut of 1 percent in lending rates woulddecrease its profit by trillions of dong this year.

Meanwhile, LienVietPostBank’s representative said with the bank’s totaloutstanding loans of about 191 trillion VND (8.23 billion USD), if it reducedlending rates by 1 percent, its yearly profit would decrease by about 600billion VND.

Nguyen Hong Quna, deputy general director of TPBank, said banks were ready toshare difficulties with enterprises and accept lower profits.

At the meeting, banks also asked the central bank to lift the credit limit inthe last months of this year so that they would have more room to supportcustomers.

Nguyen Thanh Tung, deputy CEO of Vietcombank, said the bank had maintained lowinterest rates since the beginning of the year with the average short-termlending rate at around 6 percent per year and long-term rate 8 percent peryear.

“At the beginning of the year, Vietcombank was assigned a credit target of 10 percent,but so far, credit has grown by 9 percent. Therefore, to continue to supportcustomers, Vietcombank urgently needs to have higher credit 'room' in the lastmonths of the year,” Tung said.

Loosening credit limits was also recommended by commercial banks such as SHB,TPBank and LienVietPostbank.

Pham Thanh Ha, director of the central bank’s Monetary Policy Department,highly appreciated the consensus of banks in reducing interest rates to supportenterprises. However, he noted that banks should be flexible in reducinginterest rates, depending on their health to have an appropriate reduction.

General Secretary of Vietnam Bankers Association Nguyen Quoc Hung also saidbanks still had to ensure the highest level of system safety due to thenegative impacts of the global financial crisis. The pandemic's impact on thebanking industry would have a time lag, so they needed to prepare solutions forthemselves.

“Currently, the banking industry shares difficulties with businesses, but inthe future, when bad debts increase due to the pandemic, who will share withthe banking industry? Therefore, support must be in the spirit of ensuringsystem safety," Hung said.

He also proposed the State Bank consider assigning annual credit quotas,especially for the banks that have applied Basel II and Basel III which shouldbe given priority in setting credit limits./.
VNA

See more

National Highway 61C (Photo; baohaugiang.com.vn)

Hau Giang, JICA to upgrade national highway

National Highway 61C linking Can Tho city with Hau Giang province will feature four lanes for motor vehicles and two for non-motorized traffic, with an estimated cost of over 5.17 trillion VND (206.8 million USD).

At the ceremony (Photo: nhandan.vn)

Ha Nam grants investment certificates for two key projects

Ha Nam province on February 13 licenced the high-precision circuit board manufacturing plant of Red Board Technology (Vietnam) Co., Ltd., and the kitchenware and related metal products manufacturing plant of Casla Kitchenware JSC.

A total of 18,893 cars were sold in Vietnam in January, a drop of 40% compared to the previous month (Photo: VietnamPlus)

Car sales in Vietnam down 40% in January

Experts attributed a sharp decline in car sales to the Lunar New Year (Tet) holidays, impacting consumers' purchasing power. Consumers tend to wait for new models and releases at this time of year, contributing to lower sales during this period.

Illustrative image (Photo: VNA)

Retail fuel prices in latest adjustment

According to the new pricing, E5 RON92 bio-fuel is now priced at 20,598 VND per litre, up 156 VND, while RON95-III costs 21,074 VND per litre, an increase of 146 VND.

NA Chairman Tran Thanh Man speaks at the session on February 13. (Photo: VNA)

NA weighs new policies to boost science, technology, innovation

The resolution, presented at the February 13 session of the NA Standing Committee, seeks to establish a legal framework that would effectively boost national scientific-technological advancement and digital transformation, making them driving forces for socio-economic development to deliver on the dual targets by 2030 and 2045 as outlined at the 13th National Party Congress.

CPI in January 2025 rose by 0.98% compared to December 2024 (Photo: thoibaotaichinhvietnam.com)

Fiscal, monetary policies support demand stimulation, price stabilisation

These efforts, in conjunction with the implementation of monetary policies and other macroeconomic policies, aim to solve difficulties for businesses and the public, stabilise the macroeconomy, control inflation, ensure the balance of the economy, promote economic growth, and secure social welfare and people's livelihoods.

People line up to register for land auctions in Hoai Duc district, Hanoi. (Photo: VNA)

Affordable housing for young buyers a win-win: HoREA

Most young people are ambitious and have a long career path ahead of them to generate income and repay loans. Typically, within 10-15 years, their earnings will double or triple, making such loans low-risk for banks, said HoREA