'Big guy' cuts interest rates to record low

Lowest interest rate 2.6%/year

According to the online interest rate table just announced by Vietcombank , terms from 1 to 11 months decreased by 0.2 percentage points, terms from 12 to 24 months decreased by 0.1 percentage points.

Interest rates on 1-2 month term deposits have dropped to a record low of only 2.6% per year. 3-5 month term deposits have also dropped below 3%, to only 2.9% per year. This is the lowest deposit interest rate currently, far exceeding the ceiling rate set by the State Bank for 1-5 month term deposits of 4.75% per year.

For term deposits from 6-11 months, Vietcombank further reduced by 0.2 percentage points, to only 3.9%/year. This is an interest rate even lower than the term of 1-5 months at many joint stock commercial banks.

The highest deposit interest rate at Vietcombank is for 12-24 month term, but it is only 5%/year.

Meanwhile, interest rates at the "big" banking group such as Agribank , VietinBank and BIDV have shown no signs of change.

now 4012.jpg — *Vietcombank continues to lead the race to reduce deposit interest rates. (Photo: Hoang Ha).*

At other banks, the 6%/year interest rate has also gradually disappeared. Notably, today there is no bank that pays deposit interest at 6%/year for a term of 6-9 months.

PVCombank, the only bank that maintains the 6-9 month term at over 6%, has suddenly reduced the interest rate for all terms. Specifically, the 1-5 month term has been reduced by 0.3 percentage points to 3.65%/year. The 6-9 month term has also been reduced by 0.5 percentage points to 5.6%/year. PVCombank is the last bank to reduce the interest rate for these terms to below 6%/year.

Interest rates for the remaining terms were also adjusted down by 0.5 percentage points compared to before. The 12-month term has also officially lost the mark of over 6% to fall back to 5.6%/year. Interest rates for deposit terms from 18-36 months also dropped sharply from 6.5% to 6%/year.

VietBank officially reduced interest rates by 0.2 percentage points for terms of 15-36 months. Deposit interest rates for these terms have all dropped to 6.2%/year. Interest rates for terms under 15 months remain unchanged and are all below 6% after the adjustment on November 7.

VietBank has become the first bank to lower deposit interest rates for the second time since early November.

Since the beginning of November, 16 banks have reduced their deposit interest rates, including Sacombank, NCB, VIB, BaoVietBank, Nam A Bank, VPBank, VietBank,SHB , Techcombank, Bac A Bank, KienLongBank, ACB, Dong A Bank, PG Bank, PVCombank, Vietcombank. Of which, VietBank has reduced interest rates twice this November.

State Bank temporarily suspends issuance of credit notes

On November 9, the State Bank of Vietnam (SBV) temporarily suspended the issuance of new treasury bills for the first time since late September.

The State Bank has started withdrawing money through the treasury bill channel since the end of September until now, with the scale as of November 8 being more than 360,000 billion VND.

Since the beginning of November, the scale of treasury bills issued per session has decreased to below 10,000 billion VND.

Previously, the State Bank also withdrew money through the treasury bill channel with a total scale of nearly 400,000 billion VND in February 2023.

The SBV's continuous offering of treasury bills will help the agency re-control interbank interest rates at a stable level (not allowing them to decrease sharply), thereby affecting the VND/USD interest rate difference, indirectly affecting the exchange rate.

In an analysis report sent to investors earlier this week, SSI Research said that the pressure to issue treasury bills will be higher as this week will see an additional VND65,000 billion of treasury bills maturing, while the interest rate difference between VND and USD remains high.

The increase in VND interest rates in the interbank market will help narrow the gap with USD interest rates, reducing pressure on the exchange rate.

However, overnight interest rates cooled down at the beginning of this week, reaching 1%, down 30 basis points from the previous week. In the trading session on November 8, overnight interest rates fell to 0.83%. The difference between overnight VND/USD interest rates remains around 400 basis points.

Since the beginning of November, deposit interest rates have continued to fall, but the decline has shown signs of slowing down. Specifically, the 11-month deposit interest rate averaged 4.99%, down 14 basis points compared to October and down 200 basis points compared to the same period last year.

For the 12-month term, the average deposit interest rate reached 5.44%, down 18 basis points compared to October, and down 214 basis points compared to the same period last year.

According to BVSC, slow credit growth has put commercial banks under little pressure to mobilize capital. According to the State Bank of Vietnam, as of October 27, credit growth across the system reached 7.1% compared to the beginning of the year, while the plan was set at 14%.

However, with interest rates on the decline, credit growth may accelerate in the coming period. According to the results of the survey on business trends of credit institutions in the fourth quarter of 2023 conducted by the State Bank, outstanding credit is expected to increase by 4.4% in the third quarter of 2023 and by 12.5% in 2023.

HIGHEST DEPOSITS INTEREST RATE TABLE ON NOVEMBER 10, 2023 (%/year)
BANK	1 MONTH	3 MONTHS	6 MONTHS	9 MONTHS	12 MONTHS	18 MONTHS
OCEANBANK	4.6	4.6	5.8	5.9	6.1	6.5
CBBANK	4.2	4.3	5.7	5.8	6	6.1
HDBANK	4.05	4.05	5.7	5.5	5.9	6.5
PVCOMBANK	3.65	3.65	5.6	5.6	5.7	6
VIET A BANK	4.5	4.5	5.6	5.6	6	6.3
BVBANK	4.4	4.7	5.55	5.65	5.75	5.75
BAOVIETBANK	4.4	4.75	5.5	5.6	5.9	6.2
NCB	4.45	4.45	5.5	5.65	5.8	6
GPBANK	4.25	4.25	5.45	5.55	5.65	5.75
BAC A BANK	4.35	4.35	5.4	5.5	5.6	5.95
KIENLONGBANK	4.55	4.75	5.4	5.5	5.5	6
VIETBANK	3.9	4.1	5.4	5.5	5.8	6.2
SCB	4.5	4.5	5.35	5.45	5.65	5.65
OCB	4.1	4.25	5.3	5.4	5.5	5.9
DONG A BANK	4.2	4.2	5.2	5.3	5.55	5.7
SHB	3.5	3.8	5.2	5.4	5.6	6.1
SAIGONBANK	3.4	3.6	5.2	5.4	5.6	5.6
EXIMBANK	3.5	4	5.2	5.5	5.6	5.8
VIB	3.8	4	5.1	5.2		5.6
LPBANK	3.8	4	5.1	5.2	5.6	6
MB	3.5	3.8	5.1	5.2	5.4	6.1
SACOMBANK	3.6	3.8	5	5.3	5.6	5.75
VPBANK	3.7	3.8	5	5	5.3	5.1
TPBANK	3.8	4	5	5	5.55	6
MSB	3.8	3.8	5	5.4	5.5	6.2
PG BANK	3.4	3.6	4.9	5.3	5.4	6.2
NAMA BANK	3.6	4.2	4.9	5.2	5.7	6.1
ABBANK	3.9	4	4.9	4.9	4.7	4.4
SEABANK	4	4	4.8	4.95	5.1	5.1
TECHCOMBANK	3.55	3.75	4.75	4.8	5.25	5.25
AGRIBANK	3.4	3.85	4.7	4.7	5.5	5.5
VIETINBANK	3.4	3.75	4.6	4.6	5.3	5.3
ACB	3.3	3.4	4.6	4.65	4.7
BIDV	3.2	3.5	4.4	4.4	5.3	5.3
VIETCOMBANK	2.6	2.9	3.9	3.9	5	5