A customer borrows at a bank in Hanoi. Lower lending rate is expected a factor that promotes the recovery of consumption and private investment in the coming quarters. (Photo: VNA) In a recent report, VnDirect’s analysts said they believe lower lending rateswill be the factor that promotes the recovery of consumption and privateinvestment in the coming quarters.
According to VnDirect’s analysts, the capital cost of banks is reducing thanks tothe impact of the State Bank of Vietnam (SBV)'s four policy interest rate cutssince the beginning of this year and the issuance of Circular No. 02/2023 thatallows extending the provision for bad debts.
According to VnDirect's statistics, at the end of July, the 12-month depositinterest rate of State-owned banks dropped to 6.3 per% year, down 1.1percentage points compared to the beginning of the year.
Meanwhile, 12-month deposit interest rates of private banks range from 6.3% to7.0% per year and average at about 6.7% per year, down nearly 1.6 percentagepoints compared to with the beginning of the year. In the group of private banks,deposit interest rates decrease most significantly by 0.3-0.7% per year in somebanks such as VIB, TPBank, LPBank, Sacombank, SeABank, VPBank, SHB and OCB.
VnDirect forecast the average deposit interest rate for 12-month term willdecrease to 6.0-6.2% per year in the second half of 2023 due to the impact offour policy interest rate cuts of the SBV and slow credit growth in the firsthalf of 2023. Besides, the Government will further promote public investment,thereby injecting more money into the economy, while the SBV still has room toloosen monetary policy.
The SBV has continuously asked credit institutions to minimise costs andstabilise lending interest rates to support business recovery and development.
The central bank set this year’s credit growth target for banks at 11%, buttotal outstanding loans in the economy increased by only 3.36% as of June 15compared to the end of 2022, the lowest level for the past ten years./.
VNA
