The deposit interest rates of individual deposits at foreign banks had strongly differentiated. While some banks were trying to attract customers with attractive interest rates similar to that of domestic banks, others showed little interest in posting modest interest rates, which even approximated demand deposit rates.
Currently, there were nine banks with 100 percent foreign capital in Vietnam, including HSBC Private International Bank (HSBC), Shinhan Bank Vietnam Limited (Shinhan Bank), Woori Bank Vietnam Limited (Woori Bank), Standard Chartered Bank Vietnam Limited (Standard Chartered Bank), ANZ Bank Vietnam Limited (ANZ), United Overseas Bank Vietnam Limited (UOB), Hong Leong Bank Vietnam Limited (Hong Leong), Public Bank Vietnam Limited (Public Bank) and CIMB Bank Vietnam Limited (CIMB Bank) together with two joint-venture banks, Indovina Bank Limited (Indovina Bank) and Vietnam Russia Joint Venture Bank (VRB). However, at the end of 2017, ANZ sold the retail segment to Shinhan Bank.
Observations on the market showed that individual deposit interest rates at these banks were strongly differentiated. While some banks were trying to attract customers with attractive interest rates similar to that of domestic banks, others showed little interest in posting modest rates, which even approximated demand deposit rates.
The interest rate for one to three-month terms
The interest rates of savings deposits in dong with term of one to three months from foreign banks had significant differences, up to five percentage points.
HSBC listed the lowest interest rate, only from 0.5 percent to 1.25 percent per year. The interest rate for one-month term deposits at this bank was 0.5 percent per year, equivalent to the demand interest rate of local private banks. Slightly more, Standard Chartered listed at 1.30 percent to 2.87 percent per year.
Group of three banks Shinhan Bank, Woori Bank, UOB had interest rates from 3.5 percent to 4.2 percent. Specifically, Shinhan Bank kept at 3.5 percent to 3.9 percent, UOB was 3.65 percent to 4.2 percent, and the three-month term rate of Woori Bank was 3.9 percent.
Remaining banks had higher interest rates, competing with domestic banks. For example, VRB listed interest rates up to 5.5 percent per year, which was equal to the ceiling interest rate term of one to three months as prescribed by the State Bank of Vietnam (SBV). Two other banks were keeping the ceiling rates, including Indovina Bank (three-month term) and HongLeong Bank (one-month and three-month terms). They were followed closely by Public Bank with 4.8 percent to 5.3 percent and CIMB Bank with 4.7 percent to 5.1 percent.
Six-month term interest rate
For six-month term deposits, the survey showed that most interest rates of foreign banks were lower than domestic banks.
The lowest was still HSBC Vietnam, at 1.75 percent per year. At Standard Chartered, the six-month interest rate remained at 2.87 percent, equal to the listed interest rate for three-month terms.
The two joint-venture banks, Indovina Bank and VRB, apply higher interest rates than 100 percent foreign-owned banks when listing six-month interest rates at 6.7 percent per year and 7.3 percent per year.
Among the banks with 100 percent foreign capital, Public Bank listed the highest interest rate, at 6.6 percent per year. Holding the second position was CIMB Bank, with 5.7 percent. Some other banks, such as Shinhan Bank, Woori Bank, UOB, Hong Leong Bank, had listed interest rates from 4.45 percent to 5.2 percent.
The term interest rate was from 1 year and above
Similar to the short terms, the interest rate of mobilising capital from a one-year term and above also has strong differentiation among banks.
The bank with the most competitive interest rate was still VRB. This bank was posting interest rates for 12 and 13-month terms of 7.7 percent per year and from 7.1 percent to 7.5 percent per year for terms of 15, 18, 24 and 36 months. It was followed by Public Bank and Indovina Bank with 7.6 percent per year and 7.5 percent per year for 12-month deposits, over 12 months from 7.6 percent to 7.8 percent per year depending on the term.
These were not only the top high interest rates in the group of banks with foreign elements in Vietnam, but also higher than the equivalent interest rates at many domestic banks such as Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank), Vietnam Bank for Agriculture and Rural Development (Agribank), and Vietnam Joint Stock Commercial Bank for Industry and Trade (Vietinbank), Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV), Vietnam Technological and Commercial Joint-Stock Bank (Techcombank), Sai Gon Thuong Tin Commercial Joint Stock Bank (Sacombank), Military Commercial Joint Stock Bank (MBMBBank), Vietnam Asia Commercial Joint Stock Bank (Viet A Bank), HCM City Development Joint Stock Commercial Bank (HDBank), Saigon Hanoi Commercial Joint Stock Bank (SHB), Ocean Commercial One Member Limited Liability Bank (OceanBank), etc.
CIMB Bank and UOB were also two listed banks with high interest rates in these medium terms, ranging from 6.1 percent to sevent percent per year.
Outside of the medium and long-term capital mobilisation race at the end of the year, HSBC or Standard Chartered has meager interest rates, respectively 2.75 percent and 2.87 percent per year. This interest rate was even half of Hong Leong Bank’s one to three-month deposit interest rate.
Interest rates at some banks changed slightly compared to September
Compared to September, interest rates at foreign banks were generally unchanged. Only a few banks had evolved, such as Standard Chartered, Shinhan Bank, and Public Bank.
The latest interest rate table listed on October 25 at Standard Chartered showed that banks reduced one-month interest rates from 1.95 percent to 1.3 percent. Interest rates for over one-year terms were accepted by banks and listed at 2.87 percent instead of 2.92 percent and 3.02 percent as before. In particular, the interest rates for six and 12-month terms were pushed up to 1.07 percentage points, specifically from 1.8 percent and 1.6 percent to 2.87 percent.
Previously, on October 15, Shinhan Bank also applied a new saving rate schedule, but only changed the one-month term interest rate from 3.6 percent to 3.5 percent.
Although Public Bank had reduced interest rates for terms of more than one year from eight percent to only 7.6 percent7.8 percent, it was still a foreign bank that applied the most attractive interest rates for long term deposits.
Apparently, most foreign banks had much lower interest rates when compared to domestic banks. That was understandable because the strategy of foreign banks was not so focused on price competition but focusing on improving the quality of services to meet the rigorous needs of customers with high income and care more about service quality than price.
