Banks cut rates to boost business

Banks cut rates to boost business

According to the Monetary Policy Department under the State Bank of Vietnam (SBV), 23 different commercial banks adjusted their interest rates between February 25 and March 18.

The rate cuts from banks including BVBank, MSB, VietBank, Saigonbank, BIDV, Techcombank, VietinBank, and ABBank, ranged from 0.1-1 per cent, depending on the term, with most cuts around 0.1 per cent across various tenors.

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Meanwhile, lending rates have also decreased by 0.8 per cent since the beginning of the year.

Along with actively directing banks to cut costs and lower lending rates to support business development, the SBV has also been intensifying efforts to bridge banks and businesses.

As a result, businesses have revealed that accessing capital has become easier than before, and lending rates are more reasonable. Some firms, however, report that current long-term lending rates are still relatively high.

For instance, Nguyen Van Chien, director of An Phu Steel Structure Co., Ltd. based in the northern province of Bac Ninh, said that his company is currently borrowing short-term capital from Vietcombank at an interest rate of 6-6.5 per cent, per year.

"We hope to borrow longer-term capital at more reasonable interest rate in the future so we can access land funds and expand our production and business," said Chien.

Meanwhile, many businesses want the banking sector to offer more preferential credit packages for specific sectors.

Minh Tam, chairman of Ba Tuong Production-Trading-Service Co., Ltd. based in the southern province of Binh Thuan, proposed that the banking sector create additional preferential interest rate packages to support agriculture, particularly in green agriculture.

According to the SBV, the average lending rate decreased by 1.3 per cent between the start and end of 2023. In 2024, the average lending rate decreased by 1.4 per cent. From the beginning of 2025 until now, lending rates have diminished by 0.8 per cent.

Doan Ngoc Luu, deputy general director of Agribank, reduced lending rates four times last year, bringing them down nearly 2 per cent compared to 2023, placing it among the lowest in the market.

For foreign invested businesses in the northern region, Agribank introduced a low-interest loan package with rates ranging from 2.4 per cent to 3.9 per cent, per year.

Nguyen Viet Cuong, deputy CEO of state major Vietcombank, said, "Since 2023, we have consistently lowered interest rates to support economic development. In line with SBV's directives, Vietcombank has pioneered maintaining a low interest-rate environment, and cutting costs to reduce lending rates."

Financial analysts assume that the low interest rates would persist at least until the end of 2025 to support development.

The SBV continues to maintain an accommodative monetary policy to stimulate credit, but there is little room for further rate reductions, along with continued focus on controlling inflation and stabilising the exchange rate.

VIR