Interest rates continue to decline
A survey of savings deposit interest rates of 28 domestic commercial banks in early March 2024 shows that the six-month term deposit interest rates are being implemented in the range of 3%/year – 4.8%/year. Most of the banks have adjusted their interest rates lower than the same period in January 2024, ranging from 0.1% – 0.5%/year depending on the term. Many commercial banks have significantly reduced the deposit interest rates to below 4%/year, specifically: SHB, Eximbank, Sacombank, MSB, Techcombank, VPBank, SeABank, ACB, MB… At the 12-month term, many banks have reduced compared to the end of 2023, ranging from 5%/year.
According to the SSI Research’s recent strategy report, experts believe that there is still room for the State Bank of Vietnam to implement another interest rate cut in 2024. The reason is that economic activities have not returned to potential growth, not to mention 2024 will be a breakthrough year for the medium-term plan 2021-2025.
The decline in deposit interest rates helps commercial banks reduce input costs, and consequently, lending rates decrease as well. Currently, the average lending rate for new and existing loans is around 8.1% – 10.2%/year. The maximum short-term lending rate in VND for some priority sectors (agriculture, rural areas, exports, small and medium-sized enterprises, supporting industries, high-tech enterprises) is around 3.8%/year.
The lending rates are currently at a very low level
The reduction in interest rates for customers and large-scale credit support packages have contributed to enabling enterprises and individuals to access preferential loan capital, contributing to production and business growth and stimulating consumption.
For example, since the beginning of 2024, Vietcombank has implemented a series of loan programs with preferential interest rates. Interest rates start from 5.3%/year for short-term production and business loans and interest rates start from 6.5%/year for long-term loans for individuals and small and medium-sized enterprises. For individual customers borrowing to buy houses, cars, or consumer loans, the preferential interest rate is 6.0%/year for the first 6 months for short-term loans (under 12 months). For medium to long-term loans, the preferential interest rate is 6.3%/year for the first 6 months.
SHB is implementing a preferential interest rate program focusing on the fields of production and business, priority sectors, and economic growth drivers according to the orientation of the Government and the State Bank. Specifically, the preferential interest rate program for enterprises with a scale of 11 trillion, the preferential interest rate program for USD loans for FDI enterprises and enterprises with export activities with a scale of 50 million USD, with an interest rate of 6.63%/year.
For individual customers, SHB has allocated 18 trillion for customers for production and business loans and preferential interest rates starting from 5.99%/year, with a term of up to 25 years.
In addition to implementing preferential credit programs, SHB also actively provides non-financial solutions to support market connectivity, input, and output in the business community, free financial advice and training for enterprises, ensuring a suitable strategy for the current period.
In the system, SHB is an active bank, proactively implementing effective and practical programs to connect banks and businesses, actively coordinating with the party committee, local authorities, business associations to organize exchanges and dialogues with customers borrowing capital in order to grasp and promptly handle difficulties and obstacles, thereby expanding the credit access capabilities of enterprises and people.
Banks are promoting online lending
In addition to reducing interest rates and implementing many large-scale preferential credit programs, banks are promoting the digitization of lending processes to simplify loan procedures from receiving applications, approval, disbursement…, bringing many benefits to banks, customers, and the economy.
With the superior strength of digital transformation, banks have improved the lending process to be faster and safer. Customers can receive approval results for consumer loans, credit card issuances, or real estate purchases within 2-5 minutes without cumbersome paperwork.
According to statistics from the State Bank of Vietnam, at least 28 credit institutions have applied technology to lending. For example, BIDV has applied technology from receiving loan applications to initiating, implementing, and managing loans for corporate and retail customers. The bank is also aiming to increase automation and apply more technology in the credit granting process.
Vietcombank has deployed a system to support the initiation of loan approval for wholesale and retail customers. In addition, the bank is studying the application of digital signatures in credit appraisal work.
Banks are actively promoting online lending
In private bank sector, VPBank has implemented online disbursement and transparent lending services for business customers; individual customers can borrow to buy cars right at car dealerships and know the approval result after 5 minutes.
Meanwhile, SHB has introduced a series of end-to-end products on the online channel, such as: eKYC account opening, online disbursement, loan against savings book, pre-approved online credit card issuance… These products are 100% implemented on SHB’s digital platform and can be easily registered in less than 1 minute, 24/7, anytime, anywhere. SHB is deploying the RLOS system to the lending process, focusing on development. Loan applications will be processed accurately and smoothly on the RLOS system in the shortest time to enhance customer experience when using banking services.
To continue implementing the Government’s directives in macroeconomic management, especially the Prime Minister’s directive in Official Letter No. 18/CD-TTg dated March 5, 2024, regarding credit growth management in 2024, banks continue to reduce costs, lower interest rates, promote safe and efficient credit, and optimize the application of digital transformation in the credit granting process, creating favorable conditions for people and businesses to access bank credit.
