HANOI – Bank for Investment and Development of Vietnam (BIDV) will continue lowering lending rates to the 14.5-15.5% range next week for exporters, agricultural firms, and small and medium enterprises, marking the fifth such move by the State-owned bank in four months.
BIDV to cut lending rates for fifth time
By Tu Hoang - The Saigon Times Daily
HANOI – Bank for Investment and Development of Vietnam (BIDV) will continue lowering lending rates to the 14.5-15.5% range next week for exporters, agricultural firms, and small and medium enterprises, marking the fifth such move by the State-owned bank in four months.
Export credits will be made available at an interest rate of 15% per year. Meanwhile, the rate applicable to loans for agricultural, and small and medium firms is 15.5% and a lower rate, at 14.5%, will be extended to corporate customers to cope with disaster consequences.
Le Dao Nguyen, a board member of BIDV, said the rate cuts were aimed at easing the headwinds faced by such businesses.
With the deposit savings rate capped at 14% a year by the central bank, there is suspicion over how the bank could make profit with the lowered lending rates because the minimum spread between deposit and lending rates should be three percentage points.
Nguyen said the rate cuts had been thoroughly weighed on the basis of corporate governance practices and that they would not lead to deposit savings rates falling.
“To reduce lending rates, we’ve taken into account the capital inflow and input capital cost to ensure liquidity, a profit margin, and risk provisions.”
BIDV expects to obtain VND420 billion in profit this year with a return on equity of 13%. Its total outstanding loans have amounted to VND270 trillion in the year to date, with VND107 trillion of it for the above sectors.