Some banks which could not borrow capital from other banks have had to negotiate interest rates with big customers in order to quickly increase short-term capital.
Some banks in HCM City are ready to offer high interest rates of up to 9.5 percent per annum.
At bank N., the 13-month deposit rate is listed at 8.3 percent per annum, applicable for deposits from 500 million dong and more. However, if customer deposits from one billion dong, the bank’s leader will consider and may approve the rate of 8.8 percent per annum.
L.V.P. Head of bank V. transaction office said that a customer requested to increase interest rates from 7.8 percent to nine percent per annum for his 10 billion dong deposit, otherwise he will withdraw the money when the deposit matures. According to P., bank V. is applying 7.8 percent per annum for 13-month deposit, but if customer deposits several billion dong and requests for higher interest rate, the bank’s senior leader may consider and accept to pay 8.8 percent 8.9 percent per annum deposit rate.
At some banks, applicable interest rates may be high if customers choose Certificate of Deposit (CD). Viet A Commercial Joint Stock Bank (VietABank) announced 24-month rate at up to 9.1 percent per annum. Saigon Hanoi Commercial Joint Stock Bank (SHB) applies the rates for 18-month, 24-month and 36-month terms at respectively 8.6%, 8.7 percent and 8.8 percent per annum. According to a leader of the State Bank of Vietnam (SBV), since deposit rates on terms from six months and more are floated, commercial banks can negotiate higher interest rates than their listed rates.
Dr Lawyer Bui Quang Tin (HCM City Banking University) said that some banks may be unable to borrow from other banks (on the interbank market) because they have used up the credit growth limit and they thus have to negotiate interest rates with big customers in order to quickly raise short-term capital and reduce the ratio of using short-term funds for medium and long-term to 40 percent as regulated.
Banks which mobilise capital at interest rates from nine percent per annum to supplement capital source for lending to housing investment, consumption, etc., popular rates of 11-13 percent already bring them profit.
Caution needed for corporate bonds
General director of a bank in HCM City said that in the context when the SBV tightens credit growth, limits real estate lending, gradually lowers the ratio of short-term funds used for medium and long-term from 40 percent to 30%, some businesses could not borrow hundreds of billion dong from a bank because the bank is only allowed to expand outstanding credit by six to eight percent. Therefore, the business and bank cooperate to issue bonds so that the business can directly borrow capital from people at a higher rate than deposit rate but still lower than the rate offered by the bank.
Dr Tin assessed that this investment channel is potentially risky, because if unfortunately the business that issued the bonds could not afford to pay, buyers will suffer. Meanwhile, as the credit growth limit of each bank is very low, no bank is willing to guarantee for the business in repaying bond interest and principal. Not to mention, if the operation of the business faces difficulties, the guaranteeing bank will also suffer.
