Average interest rate on outstanding loans declines
Average interest rate on outstanding loans declines
Existing loans in dong, which are subject to interest rates of over 15 per cent per year, now account for about 29 per cent of the country's total outstanding loans, the State Bank of Viet Nam has reported.
This was announced after the SBV last Thursday collected reports from 69 lending institutions, which represented 90 per cent of the domestic credit market.
This ratio has decreased about 60 per cent from figures posted before July 15, when the central bank called for commercial banks to lower lending rates to below 15 per cent to help struggling enterprises.
According to the SBV, loans with interest rates of 13-15 per cent now account for about 49 per cent; 10-13 per cent represent 18.5 per cent; and below 10 per cent make up 3.4 per cent.
In central city of Da Nang, about 40 per cent of existing loans saw lending rates adjusted to 15 per cent and below, municipal reports said. Local branches of Agribank, BIDV, Vietcombank, Asia Commercial Bank, Military Bank, An Binh and Nam Viet adjusted rates for half for all of their existing loans.
In the central Quang Tri Province, a similar interest rate level was applied, resulting in a combined existing loan value of about VND2.15 trillion ($102.87 million). Over 26,800 clients enjoyed the rate adjustment, including 410 companies and over 26,400 households.
Loans with lending rates of below 15 per cent have also reached nearly 70 per cent in HCM City, Thoi bao Ngan hang (Banking Times) reported.
To Duy Lam, director of the SBV's HCM City branch, said local banks in June reorganised a total loan value of VND10-12 trillion ($478.47-574.16 million) to ease pressure on enterprises.
He said many preferential lending packages with interest rates of 11-13 per cent were being promptly enacted in prioritised sectors, with over VND26.6 trillion ($1.27 billion) lent to areas including agriculture and rural development, export, supporting industries and small – and medium-d enterprises.
Dong A Bank general director Tran Phuong Binh said many banks were willing to accept a cut in profits to share difficulties with companies, as banks could hardly stay healthy as long as firms remained weak. His bank was trying to boost lending in the real estate area by financing home buyers, he added.
Sacombank general director Phan Huy Khang said his bank has actively reduced interest rates, restructuring debts and rescheduling terms for debt payment, with a reorganised debt value of over VND150 billion ($7.18 million).
Nguyen Thi Huan, director of egg producer Ba Huan, said that with interest rates having become reasonable, the company planned to invest upgrade production chains and boost sales.
Vo Quoc Thang, chairman of building material company Dong Tam Co, said with recent interest rate developments, the company ran at full factory capacity instead of only 60-70 per cent as it did several months ago. He noted that besides banks' efforts, authorities needed to actively work to stimulate market demand.
Some enterprises said interest rates should be lowered to around 10 per cent in order for domestic firms to compete with both regional and global enterprises.
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