Banks lower savings rates but base rate could still be high
Banks lower savings rates but base rate could still be high
Several local banks have reduced their interest rates in recent days, going against the banking sector’s general year-end trend of increasing rates to boost earnings. 
On Monday, Saigon Commercial Bank (SCB) cut its 24-month savings rate by 0.2 percentage point to 7.55 per cent per annum.
Ban Viet Bank (VietCapitalBank) in early November curbed savings rates by 0.1-0.2 percentage point for accounts with terms of less than 12 months and more than 24 months. But the bank raised rates for 15-month accounts by 0.2 percentage point to 8.5 per cent per annum.
At Eximbank, savings rates for 15-month and 18-month accounts were also cut by 0.2 percentage point to 8.1 per cent per annum.
Savings rates were reduced by 0.1-0.2 percentage points by ABBank, Saigon-Hanoi Bank (SHB), VPBank and Techcombank.
The banks’ third-quarter financial reports showed they had all recorded increases in customer savings as of the end of September.
In contrast, other banks have raised savings rates by 0.2-0.7 percentage points for less-than-12-month accounts, such as National Citizen Bank (NCB) and Vietnam Public Bank (PVcomBank).
Central banks in Southeast Asia and East Asia such as Thailand, China, South Korea, India, Indonesia and the Philippines have cut their base interest rates to stimulate the economy and raise inflation.
The State Bank of Vietnam (SBV) last week pumped a net value of VND6 trillion (US$258.6 million) into the banking sector to help reduce interest rates.
At the ongoing 14th National Assembly’s seventh meeting, Prime Minister Nguyen Xuan Phuc urged banks to cut lending rates by a minimum of 0.5 per cent for prioritised industries in 2020 to boost their performances.
SSI Securities Corporation's (SSI) research unit (SSI Research) said in a recent report there was barely a change in both saving and lending interest rates in the last two months of the year.
The range of interest rates had not changed much though banks had lowered their rates by 10-20 basis points and there was still a gap between small-cap and large-cap banks, SSI Research said.
Interest rates of 4.1-5.5 per cent per annum for savings with terms of less than six months, 5.3-7.8 per cent for savings with terms of 6-12 months and 6.4-8.1 per cent for savings with terms of 12 and 13 months.
According to SHB General Director Nguyen Van Le, banks were raising long-term capital from customers to boost their performances in the final months of the year.
According to the Bank for Investment and Development of Vietnam (BIDV)’s Institute for Training and Research, interest rates had increased by on average 0.4 per cent in the first 10 months.
Banks wanted to increase capital to meet the demands for borrowing at the year-end, meet Basel 2 standards on capital adequacy ratio (CAR), and match the SBV’s policy to reduce the use of short-term capital to pay medium- and long-term loans.
Banks were having difficulties because the credit limit was set at 14 per cent for 2019 so some banks, which had almost crossed the bar, had to consider lowering saving rates to save costs, according to business insiders.
