Banks lower deposit interest rates

By Quynh Trang   December 21, 2022 | 03:00 pm PT
Banks lower deposit interest rates
An employee counts Vietnamese banknotes at a bank in Hanoi. Photo by VnExpress/Giang Huy
Banks have lowered deposit rates by 0.4-1.1 percentage points, but the rates have remained relatively high across the board.

National Citizen Commercial Bank (NCB) has lowered its 12-month deposit interest rate by 0.5% to 11.5% per year, still among the highest in the industry.

Saigon – Hanoi Bank (SHB) reduced its 18-month interest rate from 12% to 10.9% per year.

For deposits of six months or more, Saigonbank lowered its rates by 0.4-1%. Its highest rate is now at 9.5%, against 10.5% from a few weeks earlier.

Maritime Bank (MSB) lowered its rate by 0.4% points in several different tenures.

The rate cuts came after banks agreed to a Vietnam Bank Association (VNBA)'s proposal to bring deposit interest rates down in order to reduce loan interest rates and provide more businesses access credit to help boost Vietnam's post-Covid economic recovery.

VNBA said that the "interest rates race" over the last few months was the result of small lenders reporting short-term cash shortages as depositors withdrew their money to deposit it at larger banks they believed were more reliable.

State Bank of Vietnam Deputy Governor Dao Minh Tu said earlier that banks need to lower their deposit interest rates while still ensuring financial security. He argued that bank shareholders need to accept lower profits when deposit interest rates drop.

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