Banks provide packages to aid enterprises amid 3rd Covid-19 outbreak
Banks in Vietnam are responding to the government’s call in forgoing parts of their profits to support customers affected by the pandemic.
While the third Covid-19 outbreak is again putting the business community under severe stress, major banks, including BIDV, Vietcombank, Vietinbank and Agribank are providing financial packages to help customers overcome such difficulties.
Customers at a Vietinbank branch in Hanoi. Photo: Tien Lam
BIDV has announced a credit aid package with preferential interest rates worth VND10 trillion (US$430.3 million) from February 24-September 30 for small and medium enterprises (SMEs)
Under the program, customers seeking loans of up to three months would be entitled for interest rates from 3.8-5.5% per annum while loans of three to six months would enjoy interest rates of 4-6%; and 4.5-6.5% for loans of up to nine months.
The lender previously offered short and mid-term credit support for SMEs worth over VND100 trillion (US$4.3 billion), while stepping up efforts to assist local enterprises in domestic and international transactions via its iBank app.
Another state-owned bank, Vietcombank, estimated 105,000 customers would participate in its supporting programs from February 22-May 22 with outstanding loan worth VND350 trillion (US$15.05 billion), or 40% of Vietcombank’s total outstanding loan.
For enterprises, Vietcombank would cut 10% of the interest payment for those severely affected by the pandemic, and 5% for those being hurt in a lesser extent.
Meanwhile, the bank is offering a reduction of 0.2% in interest rates per year for individual customers seeking loans for business purpose.
“In 2021, Vietcombank is committed to further providing support for both enterprises and the people,” said the bank’s Chairman of Board Nghiem Xuan Thanh, adding the bank’s target this year is to ensure efficient business performance and sharing difficulties with the society.
With a similar view, Chairman of Board of VietinBank Le Duc Tho stressed the bank plans to assess the impact level of customers to provide supportive measures accordingly.
“Vietinbank aims to further reduce its interest rates for businesses and individual customers,” he noted.
Central bank to keep low-interest rate environment
Nguyen Tuan Anh, director of the Credit Department for Economic Sectors of the State Bank of Vietnam (SBV), said the pandemic situation in Vietnam and worldwide have impacted almost all economic sectors.
“It is, therefore, necessary to delay the roadmap for reducing the ratio of short-term capital for medium- and long-term loans at banks, so that lenders are in better position to provide capital for customers affected by the pandemic,” said Tuan Anh.
A report from Viet Dragon Securities Company suggested while the inflation rate in 2021 could expand by 3.5% year-on-year, lower than the government’s target of 4%, lending rates may further be reduced to aid economic recovery.
SSI Securities Corporation noted the recent Covid-19 outbreak could weaken credit demand, as such, interest rates are likely to stay unchanged and even go down in case the pandemic situation becomes worse.
Banking expert Can Van Luc said the government’s priority is to maintain stable interest rate environment as part of the overall efforts to minimize impacts of Covid-19 on the macro-economy.