Banks raise interest rates to shore up deposits

By Quynh Trang   May 7, 2024 | 05:00 pm PT
With deposits falling for the first time in two years, more than 10 banks have hiked interest rates, the highest increase being 1.6 percentage points.

LPBank, the lender with the highest credit growth rate last quarter, raised its rates by 0.7-1.6 percentage points for deposit terms of up to 12 months.

Others like Sacombank, TPBank, VIB, BVBank, Shinhan Bank, GPBank, and BacABank have hiked their rates by 0.1-0.5%.

The highest rates now for 12- and 24-month deposits are 5.4% and 6% at Oceanbank.

While no large private or state-owned banks have raised their rates, this is the first time in over a year that more than 10 have increased deposit rates more or less simultaneously.

After a prolonged period of interest rate cuts, lenders have little room to cut them further and deposits have declined, analysts said.

Bank deposits fell for the first time in two years in January. By the end of March they had fallen by 0.76% for the year, according to the General Statistics Office.

Credit grew by 0.9% in the first quarter to VND13.79 quadrillion.

Analysts said if credit grows this year, deposit interest rates might rise slightly in the second half.

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