Banks rush to launch credit packages at breakeven prices

Sep 5th at 12:42

05-09-2012 12:42:56+07:00

Big enterprises have confirmed that they have accessed the bank loans with the low interest rate of 9 percent per annum, which is just equal to the short term deposit interest rates.

Vu Van Thanh, Deputy General Director of Hoa Sen Group, said on Dau tu Chung khoan that in late August, Hoa Sen got the short term dong loan at the interest rate of 9 percent per annum and dollar loan at 3 percent per annum.

The Hoa Phat Group has also said that Vietcombank and Vietinbank, two of the biggest commercial banks in Vietnam, have offered the low cost credit packages with the interest rate of 9 percent for dong and 3.2 percent for dollar loans.

Both Hoa Sen and Hoa Phat have affirmed that the interest rates have decreased significantly, which would help businesses reduce their production costs.

The HCM City Branch of the State Bank of Vietnam has confirmed that some credit packages with the interest rates of 9 percent and 2 percent for dong and dollar loans have been launched into the market. This is a step made by the banks to lure good clients and to push up lending in the context of capital excess.

Nguyen Hoang Minh, Deputy Director of the HCM City Branch, said in principle, commercial banks, which compete with each other to attract more clients, have to offer low cost credit packages. However, Minh said that only state owned banks or the banks, where the State holds the controlling stakes, can offer loans at such low interest rates. Meanwhile, small banks, whose input capital comes mostly from deposits, cannot do that.

Sacombank’s General Director Phan Huy Khang believes that the 12-15 percent interest rates would be reasonable in the current circumstances. ANZ Bank, after providing the loans at 9 percent per annum, has raised the lending interest rate to 11.5 percent again.

Commenting about the moves of the big banks to slash lending interest rates, economists say this would help businesses regain their strength and resume production.

However, the interest rates have been just applied to short term loans; this means that businesses still cannot think of making long term investment right now. Therefore, it’s too early to say that the interest rate reductions would help make the economy prosper.

The outstanding loans of banks have been increasing slowly than initially planned. Though the capital demand is big and the interest rates have been slashed sharply, the capital still has got stuck because not many businesses can meet the requirements to be eligible for loans.

Infonet has quoted a banker in HCM City as saying that banks would set strict requirements on the clients who want to access the low cost credit packages at the interest rate of 9 percent per annum..

He also said that the 9 percent interest rate would be applied only for the first some months, while the interest rates would be floated for the next months.

That explained why banks all have declined to reveal the figures about the sums of money disbursed so far under the program on lending at interest rates.

Also according to Infonet, HSBC pioneered the movement of lending at breakeven prices with the program to fund house purchases. Under the program, clients can borrow dong at the interest rate of 9.9 percent per annum. However, the rate would be applied only for the first three months. The interest rates for the next months would be adjusted in accordance with the market price.