On the very first days of working after Tet holiday, the market witnessed numerous deposit rate promotions within two to three days. However, that is only the starting point for the race in mobilisation among banks which is becoming increasingly attractive. High interest rates and good promotions are still the tools that overwhelm the so-called “service quality”.
Some banks assigned employees to call customers and notify them that they would enjoy interest rate of up to 8 percent per annum if depositing money on 12-month term, while the rate was only 7.4 percent per annum on the same term not long ago.
In addition, many banks have launched promotional programmes to attract depositors. HDBank is offering a bonus deposit rate of up to 0.7 percent per annum. Meanwhile, from now until April 30th, when opening Mang Non or Ong Vang savings book at Maritime Bank, customers will have an additional effective way to make their financial plan in the Year of Dog and immediately receive a lucky money.
Will lending rates fall when mobilisation gets hot?
There is a worth mentioning story in this race of mobilisation, that is when using interest rate as a tool to attract capital, bank will not be able to lower mobilisation costs and strive to reduce the cost of lending as directed by the government and the State Bank of Vietnam (SBV).
In 2018, SBV aims to increase total means of payment by about 16 percent and lending by about 17 percent. At the same time, via close monitoring of macroeconomic movements, currency market and foreign exchange market, SBV will consider and flexibly adjust the interest rates on the Open Market Operations (OMO) to support credit institutions (CIs) to reduce lending rates in an appropriate time and at a reasonable level.
The reduction of lending rates in 2018 is considered a central task by SBV, thereby creating more favourable conditions for enterprises in accessing capital.
In the current market situation, this task is not easy as the input interest rates can hardly be cut.
This is perhaps the reason why some large banks only offer high deposit rates for long-term deposits. At Techcombank, the highest deposit rate offered in March 2018 is 7 percent per annum on 18-month and 24-month terms, while shorter terms saw significant interest rate reduction.
Similarly, the highest deposit rate at VietinBank is 7 percent per annum on terms of over 36 months. Terms from six months to less than seven months, seven months to less than eight months and from eight months to less than nine months are offered at 5.3 percent per annum.
The above deposit rates are significantly lower than the rates currently offered by small banks, which mobilise deposits on over 12-month term at 8-8.5 percent per annum.
According to statistics of SBV, in February 2018, the deposit rate level in dong was popular at 0.8-1 percent per annum on non-term deposits and deposits of less than one month; 4.3-5.5 percent per annum for deposits with terms from one to less than six months; 5.3-6.5 percent per annum for deposits with terms from six months to less than 12 months; and 6.5-7.3 percent per annum for deposits with terms from over 12 months.
The race to increase deposit rates before and after the 2018 Lunar New Year season has made the interest rate difference between large and small banks to be increasingly widened. Nevertheless, experts believed that a part of depositors have shifted to large banks instead of coming to banks which offer high interest rates to deposit money.
Particularly, the loss of money of a VIP customer in the recent time has also made many depositors to be more cautious. This is the opportunity for banks having good mobilisation fund to not have to join the interest rate race, thereby creating a significant profit thanks to the large Net Interest Margin (NIM) this year.
