A customer borrows money at a bank in Hanoi. Lending interest rates may be lowered by 1-1.5 percentage points next year. (Photo: baochinhphu.vn) Hanoi (VNS/VNA) - There will be little room for further reductionin deposit interest rates in 2024 as they have dropped deeply to pre-COVID-19levels, while the lending interest rate can still be lowered by 1-1.5percentage points next year, Vietcombank Securities (VCBS) forecast.
Under a newly released report, VCBS said compared to the end of 2022, theaverage deposit interest rate in the banking system has decreased by 2-2.9percentage points, depending on terms. However, the decline has not been fullyreflected as the cost of deposit mobilisation has only decreased by 0.1percentage point from the peak.
According to VCBS, the deposit interest rate level currently drops deeply tothe pre-COVID-19 level and there is little room for further reduction. However,during the period of economic recovery, maintaining low interest rates will bea priority. At the same time, keeping a low deposit interest rate for a longtime is also a necessary condition to pull the lending interest rate down.
Besides, the handling of corporate bonds requires a lot of capital resourcesand a low interest rate will be a prerequisite to faster handling of the bonds.
According to VCBS, by the end of the third quarter of 2023, the average lendinginterest rate recorded on the financial statements of listed banks decreased byabout 0.6 percentage points compared to the peak in the first quarter of 2023.However, lending interest rate is still about 1.6 percentage points higher thanthe bottom recorded in the fourth quarter of 2021.
Specifically, after the State Bank of Vietnam (SBV) lowered its policy interestrates four times, deposit interest rates decreased rapidly. Actual lendinginterest rate has also gone down by about 2-2.5 percentage points for newloans. However, the interest rate applied to outstanding loans is still high atmore than 10% per year.
VCBS expects the lending interest rate will decrease by another 1-1.5percentage points in 2024. In particular, banks will consider lowering interestrate for some groups of firms which have good business prospects, with an aimto restructure debts and support customers through difficult times.
However, experts forecast that banks will be more cautious in lending as theirnet interest margin (NIM) is on the decline and bad debt is on the rise.Therefore, VCBS believes that there will be a difference in lending interestrate reduction.
Besides, the group of private banks will drop the rate more sharply than thegroup of State-owned banks due to a rise in late debt repayment. VCBS expectslending interest rates of private banks will improve in the near future whencustomers return to repay debts.
Tran Hoai Nam, deputy general director of HDBank, also said there is currentlyno room to reduce deposit interest rates, while lending interest rates willgradually decrease until the first quarter of next year.
However, it is difficult to make a long-term forecast for the rate after thattime, as it depends on domestic and world macro-economic fluctuations, Namsaid./.
Under a newly released report, VCBS said compared to the end of 2022, theaverage deposit interest rate in the banking system has decreased by 2-2.9percentage points, depending on terms. However, the decline has not been fullyreflected as the cost of deposit mobilisation has only decreased by 0.1percentage point from the peak.
According to VCBS, the deposit interest rate level currently drops deeply tothe pre-COVID-19 level and there is little room for further reduction. However,during the period of economic recovery, maintaining low interest rates will bea priority. At the same time, keeping a low deposit interest rate for a longtime is also a necessary condition to pull the lending interest rate down.
Besides, the handling of corporate bonds requires a lot of capital resourcesand a low interest rate will be a prerequisite to faster handling of the bonds.
According to VCBS, by the end of the third quarter of 2023, the average lendinginterest rate recorded on the financial statements of listed banks decreased byabout 0.6 percentage points compared to the peak in the first quarter of 2023.However, lending interest rate is still about 1.6 percentage points higher thanthe bottom recorded in the fourth quarter of 2021.
Specifically, after the State Bank of Vietnam (SBV) lowered its policy interestrates four times, deposit interest rates decreased rapidly. Actual lendinginterest rate has also gone down by about 2-2.5 percentage points for newloans. However, the interest rate applied to outstanding loans is still high atmore than 10% per year.
VCBS expects the lending interest rate will decrease by another 1-1.5percentage points in 2024. In particular, banks will consider lowering interestrate for some groups of firms which have good business prospects, with an aimto restructure debts and support customers through difficult times.
However, experts forecast that banks will be more cautious in lending as theirnet interest margin (NIM) is on the decline and bad debt is on the rise.Therefore, VCBS believes that there will be a difference in lending interestrate reduction.
Besides, the group of private banks will drop the rate more sharply than thegroup of State-owned banks due to a rise in late debt repayment. VCBS expectslending interest rates of private banks will improve in the near future whencustomers return to repay debts.
Tran Hoai Nam, deputy general director of HDBank, also said there is currentlyno room to reduce deposit interest rates, while lending interest rates willgradually decrease until the first quarter of next year.
However, it is difficult to make a long-term forecast for the rate after thattime, as it depends on domestic and world macro-economic fluctuations, Namsaid./.
VNA
