At the government’s regular online meeting in March 2020, Governor of the State Bank of Vietnam (SBV) Le Minh Hung said that on March 31st, the SBV had a meeting with 20 credit institutions (CIs) which account for 75 percent of the total outstanding credit to the economy). at the meeting, all CIs highly agreed to reduce at least two percent of lending rates compared to the time before the pandemic.
In the last two days, numerous banks have made official announcement on the credit packages and the reduction of lending rates. Some banks have even lowered lending rates by 4.5 percent per annum, and some banks cut interest rates based on the current outstanding loans.
Vietnam International Commercial Joint Stock Bank (VIB) is the first bank announcing interest rate support for existing loans, starting from April 1st 2020. Specifically, VIB continues to expand the interest rate support package with a discount from 0.5 percent to two percent in six months to all existing customers being large enterprises, small and medium enterprises (SMEs) and supermicro enterprises in all sectors.
The support package is applicable to all medium and long-term loans in dong (except for bonds) with existing interest rates from 9.5 percent per annum. As initially estimated, approximately 9,500 customers with around 10 trillion dong of outstanding loans will immediately be entitled for this support in VIB’s efforts to help customers overcome difficulties caused by the Covid-19.
HCM City Development Commercial Joint Stock Bank (HDBank) has strongly cut lending rates to all customers without requiring proof of difficulties caused by the Covid-pandemic, applicable from March 31st. Individual customers and supermicro businesses hit by the Covid-19 throughout the country are offered interest rate cut from two percent to 4.5 percent per annum.
HDBank has also designed many credit packages to different customer groups during the Covid-19 pandemic such as the 10 trillion-dong package to support the price stabilisation of consumer goods and necessities with flexible interest rates from only 6.5 percent per annum for businesses providing products and services to supermarket chains for people; the five trillion-dong package to support SME customers, the three trillion-dong package to support businesses operating in the field of supplying pharmaceuticals, medical equipment and supplies to meet the needs of dealing with the epidemic, the one trillion dong package to support rural agriculture chain to ensure the production and supply of rice to the country and also to support business and business households facing difficulties due to saline intrusion in Mekong Delta region, etc.
At the meeting on March 31st, leaders of four banks including Commercial Joint Stock Bank for Foreign Trade of Vietnam (Vietcombank), Commercial Joint Stock Bank for Investment and Development of Vietnam (BIDV), Commercial Joint Stock Bank for Industry and Trade of Vietnam (VietinBank) and Commercial Joint Stock Bank for Agriculture and Rural Development of Vietnam (Agribank) have committed to sharply lowered lending rates by 2.5 percent per annum.
Nghiem Xuan Thanh, Chair of Vietcombank said that the bank has a policy to reduce lending rates to all businesses and individuals affected by the epidemic. The total outstanding loans of sectors and industries hit by Covid-19 epidemic which are offered an interest rate cut of 0.5 1.5 percent per annum compared to the general interest rate level has now reached more than 112.7 trillion dong. In the coming time, the bank will launch a credit package worth 30 trillion dong with an interest rate cut of two to 2.5 percent per annum compared to the current level. Businesses producing essential goods will be offered an interest rate reduce of 2.5 percent per annum, and enjoy lending rates of just 4.5 five percent per annum.
In addition, the bank will continue to policy to reduce interest rates by one to 1.5 percent per annum for existing loans (with maturity on April 30th rescheduled to September 30th). Vietcombank’s profit is estimated to decrease by 300 billion dong because of this policy.
For Agribank, the bank sets a 100 trillion dong preferential loan package to support customers affected by the Covid-19 to recover, stabilise and develop production and business activities. The programme is applied to loans with disbursement from April 1st 2020 until three months after the prime minister announces the end of the Covid-19 epidemic or until the 100 trillion dong credit package is fully disbursed. Customers entitled for this programme will enjoy an interest rate cut of one percent (for loans in dong) and 0.5 percent (for loans in foreign currencies) compared to the lending rates of the same type.
Previously, Pham Hoang Duc, Chair of Agribank committed to work with other banks to carry out mechanisms and policies to support those who are directly affected by the Covid-19, including an interest rate cut of two percent.
VietinBank has also announced to further cut lending rates by two percent (compared to the credit programmes implemented before the epidemic) via a credit package worth 60 trillion dong, from April 1st 2020. The bank particularly gives incentives to businesses that supply essential goods during the Covid-19 epidemic.
In addition, VietinBank continues the unlimited-size credit programmes with interest rate cut of 1.2 three percent per annum.
For BIDV, the bank has officially announced to reduce lending rates by up to two percent per annum for both secured and unsecured loans. Specifically, for the existing outstanding credit, the bank will restructure the debt, extend the principal and interest repayment time, and cut interest rates by two percent per annum (for loans in dong) for businesses operating in the areas affected by the Covid-19 epidemic. The specific reduction level depends on the business’ sector, and level of impact by the Covid-19.
The bank also cuts the rates by up to one percent per annum (for loans in dong) for customers borrowing unsecured consumer loans paid by salary, whose income has been affected by the Covid-19 epidemic. Particularly, in case the employee loses his/ her job and is entitled to a subsidy of 1.8 million dong under the government’s direction, BIDV will cut the lending rate by two percent, and offer a grace of the due principal and interest during the epidemic time.
BIDV also has credit packages to support businesses hit by the epidemic which have new demand for loans with interest rates down by two percent compared to the same type of interest rates on December 31st 2019.
Kien Long Commercial Joint Stock Bank (Kienlongbank) decided to cut lending rates by three percent per annum compared to the rates negotiated in the credit contracts signed with individual and corporate customers. The time of the interest rate reduction is from April 1st to the end of June 30th 2020, applicable to customers in the Mekong Delta region (prioritising five provinces that have declared emergency cases including Kien Giang, Ben Tre, Ca Mau, Tien Giang and Long An), in order to provide timely and urgent support to customers damaged by drought and saline intrusion.
According to Kienlongbank, this programme aims to supplement capital for agricultural production (raising, planting, tending) including rice, fruit trees, vegetables, and acquatic products for five provinces affected by drought and saline intrusion. During this time, Kienlongbank also supports customers with no penalty for overdue debts and late interest payment. The maximum time of the interest rate exemption/ reduction is no more than three months and does not exceed June 30th 2020.
Vietnam Prosperity Commercial Joint Stock Bank (VPBank) has launched the second special support package with interest rate decline of up to two percent, applicable to businesses facing difficulties due to the Covid-19 epidemic. Specifically, for loans with secured assets, the maximum interest rate cut is 1.5 percent per annum for loans in dong, one percent per annum for loans in US dollars. For loans without secured assets, VPBank lowers the lending rate by a maximum of two percent for loans in dong and one percent for loans in US dollars.
Businesses entitled for these incentives must meet some requirements, such as operating in tourism, catering, accommodation, and transportation areas; having exporting revenue of goods to markets such as China, the US, and the Europe accounting for at least 50 percent the business revenue in 2019; or facing difficulties in repaying debts.
In addition, businesses must meet some of other questions of VPBank, such as having good credit rating for several consecutive periods, stable and transparent financial status before the epidemic occurred, seen through audited reports.
Tien Phong Commercial Joint Stock Bank (TPBank) issued more preferential interest rate programme for newly disbursed customers with a total loans balance of up to 12 trillion dong. According to TPBank, the bank also offers a five trillion dong package for SME customers; a four trillion dong package for large businesses, and three trillion dong for individual customers. The interest rate reduction is 1.5 2.5 percent per annum compared to the current interest rates.
In addition to restructuring debts, extending principal and interest for customers as prescribed, TPBank also lowered interest rates by 0.5 percent to one percent per annum for existing customers severely affected by the pandemic, with a total outstanding loans can be considered up to 30 trillion dong.
