The banking sector sacrificed profits to support the economy
- 0
- Business
- 17:23 18/09/2024
DNHN - To date, the credit market has recorded impressive growth, exceeding 6.9% compared to last year. This shows that banks are actively pushing capital into production and business.
According to experts, the positivity in Vietnam's credit growth in recent times is mainly due to the flexible and decisive policies of the State Bank of Vietnam (SBV). Achieving the 15% credit growth target by the end of 2023 has created favorable conditions for commercial banks to be more proactive in providing credit. In particular, the SBV has implemented effective measures to gradually reduce interest rates, with current deposit rates at 3.84% per year, while the average new loan rate is 6.23% per year, significantly lower than at the end of last year.
In this context, banks have actively launched many preferential credit packages to support businesses and households. Specifically, OCB has introduced a loan package with preferential interest rates starting from 5.2% per year and a loan limit of up to 10 billion VND, facilitating investment projects and production expansion. ABBANK is equally active, offering a business loan package with interest rates from 4.99% per year and a commitment to fast disbursement within 3 days to promptly meet customer needs.
Agribank, one of the largest banks, has announced a special preferential package for customers with a total capital of over 100,000 billion VND. This loan package offers interest rates as low as 3.5% per year for short-term loans and 6.0% per year for medium- and long-term loans, helping to reduce the interest burden for customers and motivate investment activities.
Recent efforts by banks to implement preferential credit packages and adjust interest rates have created favorable conditions for businesses and households. Banks like OCB, ABBANK, and Agribank have made strong moves with attractive loan programs to support business development and production expansion. This support not only demonstrates the financial system's commitment to promoting the economy but also reflects the banking sector's positivity in creating conditions for business activities.
However, despite efforts to reduce lending rates, financial experts warn that the space for further rate cuts is very limited. According to Dr. Võ Trí Thành, deeper cuts in lending rates could put great pressure on banks' profit margins and affect operational safety. This could lead to financial stress, especially as deposit rates tend to rise.
In addition, adjustments from the FED may stabilize the domestic interest rate trend, making it difficult to lower interest rates further. The stability of domestic interest rates will depend on many factors, including pressure from deposit rates and the global economic situation, which banks and regulators need to carefully consider to maintain sustainable economic growth.
Amid rising bad debt ratios and increasing provisioning costs for banks, businesses and borrowers should not expect significant reductions in lending rates. These factors put great pressure on the financial system, making it more difficult to lower interest rates. Despite efforts to adjust rates and offer preferential credit packages, the banking sector must carefully consider financial sustainability to ensure long-term customer service.
To promote economic growth in the near future, the BIDV research group recommends maintaining an active and targeted fiscal policy. This includes accelerating public investment disbursement to stimulate the economy and expand access to capital for businesses. An active fiscal policy will help create a favorable business environment, supporting the development of businesses and households.
Therefore, in addition to adjusting interest rates, maintaining a flexible and effective fiscal policy plays a decisive role in promoting economic growth and sustainable development. Banks are trying to ease the financial burden on businesses and the public, but close coordination with fiscal policies will be a key factor in helping the economy maintain growth momentum and achieve long-term goals.
Phan Chinh
Related news
#banking system
BIDV received 02 prestigious international awards for corporate products and services
Vietnam Joint Stock Commercial Bank for Investment and Development (BIDV) has just been awarded the titles of "Best API Application & Open Banking Bank in Vietnam" and "Best Trade Finance Bank in Vietnam" for 2024 by The Asian Banker.
Export-import credit is entering a “busy season”
Export-import credit is entering a bustling season, with increased activities to support businesses in expanding their international markets. Banks and financial institutions are ramping up funding, meeting the growing demand in global trade.
Why is credit growth showing signs of slowing down?
Recently, credit growth has shown signs of slowing down, which has attracted the attention of many economic analysts and policymakers. Several factors have contributed to the slowdown in credit growth.
Bank interest rates increase: Market situation and new trends
On August 13, 2024, significant changes were recorded in bank interest rates. 12 banks have increased their deposit rates since the beginning of August. Notably, many banks have raised their 12-month term interest rates above 5% per year.
Why is bank security very important?
In the digital age, the banking sector plays a crucial role in managing the finances and transactions of individuals and organizations. With the development of technology, the issue of bank security has become one of the top priorities.
SHB honored as “Best SME Bank for Sustainable Finance”
With sustainable financial solutions and a diverse range of digital products/services for small and medium-sized enterprises (SMEs), SHB has been honored as the "Best SME Bank for Sustainable Finance".
Đọc thêm Business
Dongtam Group partners with CS Wind Corp to build a wind power equipment factory
Dong Tam Group (DTG) and CS Wind Corporation (CS WIND) have officially signed a Memorandum of Understanding (MOU).
Young entrepreneurs innovating but must ensure stable business foundations
"The world is undergoing significant changes, bringing both opportunities and challenges for businesses, especially in fields such as artificial intelligence, international trade, and investment"
Why is Vietnam always attractive to foreign businesses?
Vietnam attracts foreign businesses thanks to its favorable investment environment, abundant labor, and competitive costs. Open-door policies and free trade agreements also enhance the country's appeal to global investors.
Apartment prices continue to rise far beyond workers' incomes
Apartment prices continue to rise sharply, increasingly out of reach for workers' incomes. This gap not only creates significant financial pressure but also makes homeownership increasingly difficult for the majority of people.
The stock market faces increasing selling pressure, VN-Index sank into the red
The strong selling pressure across the market, especially in the blue-chip stocks, has caused the VN-Index to drop sharply, even falling below the 1,270-point mark at times.
VREC and HREC create opportunities for member businesses to connect with Nippon Paint Vietnam
Recently, at the headquarters of Nippon Paint Vietnam, the Vietnam Real Estate Club (VREC) and the Ho Chi Minh City Real Estate Club (HREC) successfully organized a networking event for member businesses.
Cash flow real estate: New investment trend in 2024
Cash flow real estate has become an investment trend in 2024 due to its stable profitability from leasing and business operations. Interest in this type of real estate demonstrates the demand for sustainable profits in an uncertain economic context.
Is the gold price stabilization policy truly effective?
Dr. Bùi Duy Tùng, an Economics lecturer at RMIT University, assesses the pros and cons of the gold price stabilization policies implemented by the State Bank of Vietnam (SBV) in recent times.
Why is there a need for a development proposal in the field of cultural industries?
In the context of globalization and the booming creative economy, cultural industries are increasingly important in national development strategies. Vietnam needs a development proposal in this field to tap into its potential.
Mastering Real Estate Business Law to be ready for the next growth cycle
In the context of the changing real estate market alongside new legal regulations, understanding the Real Estate Business Law is a crucial factor for businesses and investors to seize opportunities and prepare well for the new cycle.
